BTC hits $70k after Trump comments: USD at risk?
Explore the surge of Bitcoin to $70K following Trump's cryptocurrency endorsements and its implications for the US dollar. Delve into how these comments could influence USD stability and investor strategies.
Key points
- Bitcoin prices hit $70,000 early Monday morning before reversing
- Former President Donald Trump signaled he would be a pro-crypto president at a conference over the weekend
- US dollar has depreciated in recent weeks against currencies like the Japanese yen
- The correlation between USD and Bitcoin is historically negative, though relatively weak
Trump says, “Never sell your Bitcoin”
At the 2024 Bitcoin Conference in Nashville, Republican Presidential Candidate Donald Trump delivered remarks that bolstered Bitcoin's status in potential financial strategies, particularly regarding its place within the US economy. He declared no intention to sell the government-held Bitcoin, hinting at an embrace of cryptocurrency under his potential presidency, diverging from other nations' practices of liquidating assets like Bitcoin.
Trump has 61% chance of winning
The prediction market Polymarket now reflects a 61% chance of Trump winning the upcoming election. This significant probability influences market sentiments, potentially integrating Bitcoin more closely into financial discussions due to Trump's favorable stance on the cryptocurrency during his campaign.
US dollar trading in bearish trend
This month, the USD/JPY experienced a sharp decline, dropping by over 4%. While a myriad of factors influence this pair's price action, this trend could suggest weakening confidence in the dollar amidst Trump's criticism of its strength and his preferences for a softer dollar to potentially boost US trade competitiveness.
Is BTC putting USD at risk?
Early Monday morning, Bitcoin prices hit $70,000 briefly before reverting throughout the day. Bitcoin's all-time highs, reached in March, rest around $74,000. As Bitcoin approaches historical highs, there is crucial discourse on its potential to disrupt traditional currency systems like the US dollar. While not an immediate threat, Bitcoin's rally coincides with a pulling back of the USD, reflecting evolving market dynamics and investor sentiments.
BTC-USD correlation: Negative
Data confirms a generally negative correlation between Bitcoin and the USD, suggesting that as Bitcoin's value spikes, the dollar often inversely retreats. However, this relationship isn't deeply pronounced, indicating that broader market conditions and policy decisions play significant roles while cryptocurrencies grow as a distinct asset class.
Can Bitcoin cause a US dollar crash?
While the inverse relationship between BTC and USD highlights a complex interplay, it appears insufficient alone to precipitate a substantial downfall of the dollar. However, significant movements in Bitcoin, like potentially reaching beyond $70k, could pressure the USD's standing, alongside other macroeconomic factors.
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