- Bitcoin starts a fresh rally, carrying the altcoin market along
- Fireworks is coming to the global currency market, and it would boost Bitcoin’s price
- Bitcoin would benefit from the volatility of the global market but not immediately
Bitcoin News Today – Over the past day, the benchmark digital currency – Bitcoin – has been consolidating higher. The digital currency is now heading towards the $9,400 mark, but it is still locked within its tight range. Recently, Max Bronstein – an analyst at Coinbase – said “fireworks” in the global market might affect the price of Bitcoin positively.
Fireworks in the Global Market Will Boost Bitcoin’s Value
Bronstein works on Coinbase’s Institutional Coverage team and he believes that “fireworks” are coming the global currency market. He said that Bitcoin (BTC) would greatly benefit from a spike in volatility of currencies. In a statement, he said:
“A lot has been said on BTC’s performance during bouts of equity volatility, but not as much on how BTC would perform during bouts of FX/currency volatility. With global currency vols off historic lows and a huge wave of new debt, fireworks are coming to the currency market.”
Bitcoin (BTC) Price Today – BTC / USD
Even before the effect of the pandemic stroke on the global economy, the Coinbase analyst said that the global monetary system was fragile. Chances are many countries will see their currencies plunge in value due to several reasons. He added that currencies are susceptible because of high-dollar denominated debts of many countries and low dollar reserves.
How Will This Move Benefit Bitcoin (BTC)?
Currencies that have experienced hyperinflation before are at risk of experiencing a similar trend in the short-term. The analyst pointed out the Turkish Lira, Argentine Peso, and the Brazilian Real as some of the currencies with very low dollar reserves. For instance, the Argentine Peso experienced an inflation rate of 42.1 percent back in May this year, according to data from Trading Economics.
The analyst said that the price of the world’s most dominant digital currency could benefit as massive currency volatility, fear of hyperinflation, and devaluation hits. He said:
“In all of these cases, currency vol and weakness will primarily stem from a government’s need to devalue their currency. Bitcoin sits in stark contrast as it can’t be debased by a central party. In a regime where nearly every government has an incentive to debase their currency, few monetary systems stand to benefit as much as Bitcoin does. Never before has an open-source competitor to fiat currency been so needed.”
Bitcoin Might Not Benefit Immediately
The global currency market’s historic low volatility does not mean that the enormous effect will happen immediately. It does not also mean that it would significantly boost the demand for the digital currency in the near term. Nevertheless, in the long-term, concerns about hyperinflation and devaluation could ignite a steady demand for BTC. The effect might not occur now, but it is set to happen in the long run.