- With the United States dollar depicting unending inflation, the use of Bitcoin as a global reserve is expected to grow exponentially in the coming years.
- The United States interest rates data is expected next week on Wednesday, whereby the Fed could pause its recent hikes.
The cryptocurrency market has demonstrated huge independence following an increased regulatory crackdown in the United States led by the Securities and Exchange Commission. Despite the U.S SEC Chair Gary Gensler deeming all digital assets as unregistered securities, the total crypto market capitalization has managed to remain above $1.1 trillion.
Furthermore, investors understand the tribulations are temporary since the United States government is also a holder of Bitcoin. Additionally, the United States has been struggling to bring down the high inflation amid the rise of BRICS organizations.
The Demise of the U.S Dollar
In the past few months, economists argued on the United States debt ceiling, which has been postponed after Congress passed the Fiscal Responsibility Act of 2023. With the bill passed by the majority of House Representatives, the Federal Reserve has been given the green light to continue printing more money for the Biden administration to spend.
According to retired American politician Ronald Ernest Paul, the Fiscal Responsibility Act of 2023 is a wake-up call to other countries and investors to ditch the dollar due to its high inflation. Paul noted in his weekly column.
The Fiscal Responsibility Act will result in increased government spending, debt, and deficits. It will also further erode the value of the United States Dollar, thus making it more likely that the US dollar will lose its world reserve currency status sooner rather than later.
Notably, Paul blamed the Biden administration for overspending on military operations including the aid to Ukraine to fight the Russian invasion. Worth noting that the Fiscal Responsibility Act of 2023 caps domestic discretionary spending for Fiscal Year 2024 at $704 billion and spending for Fiscal Year 2025 at $711 billion.
Bitcoin The Standard
The evolution of money has it that Bitcoin has fulfilled the majority of needs of investors and users in the past decade. Furthermore, Bitcoin has a fixed supply, is highly divisible, fast, and easily accessible all around the world. As a result, two countries – El Salvador and the Central African Republic – have been using Bitcoin as a legal tender with more nations accepting crypto for payments.
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With the United States dollar depicting unending inflation, the use of Bitcoin as a global reserve is expected to grow exponentially in the coming years. According to Coinbase Global, more than 80 percent of Americans agree the financial system requires an immediate update. Interestingly, nearly a third of the American population has interacted with Bitcoin among other digital assets in recent years. The figure is expected to grow significantly as investors seek to hedge against the high inflation.
Currently, Bitcoin has a market capitalization of about $516 billion as the instrument traded at around $26.6k on Friday.
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