With a further fall in the US dollar index, the price of bitcoin will continue to grow
Global hedge funds seek bailout amid a global flood of cheap dollar
Bitcoin has not yet become digital gold, but is already considered an alternative to precious metals, says the head of OKEx
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The weakening of the US dollar index directly affects the inflow of stablecoins to the exchanges with which they buy bitcoin, OKEx said
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Jay Hao, CEO of cryptocurrency exchange OKEx, believes the current rise in bitcoin price is directly fueled by a weakening dollar.
Hao wrote about this on his LinkedIn page..
As one of the reasons, Hao notes that interest rates on US Treasuries have been regularly adjusted downward along with historical quantitative easing policies..
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The head of OKEx believes that historical quantitative easing policy has led to the sale of many US dollars, leading to a decline in the US currency index.
At the time of this writing, the US dollar index is not only an annual but also a two-year low at around 93.39.
At the same time, the number of short positions in the USD derivatives market reached new highs since April 2018, Hao notes..
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The CEO of OKEx believes that international hedge funds are increasingly betting on a further fall in the US dollar lately, which plays in favor of the largest cryptocurrency by capitalization.
“While Bitcoin may not yet have achieved value-saving status, it is an alternative global investment beyond gold,” Hao wrote..
He also added that with the growth of gold and the simultaneous fall of the dollar, people will more actively begin to transfer paper savings into bitcoin and other digital currencies..
Since the end of March 2020, the capitalization of the USDT stablecoin, which is essentially an analogue of the US dollar, has been steadily growing, adding hundreds of millions of dollars monthly..
If on March 30, the market capitalization of USDT was $ 4.6 billion, then on August 9, the capitalization increased to $ 10 billion..
The capitalization of another stablecoin USDC is also growing, although not as much as in the case of USDT..
Since the end of March, USDC capitalization has grown by $ 454.8 million to $ 1.1 billion.
Instrument of payment
Along with the growth of capitalization of stablecoins, the overall balance of bitcoins on exchanges is also growing..
“Based on this, we can assume that most of the USDT entering the exchanges was used to buy bitcoin,” concluded Hao.
The head of the largest exchange by the size of transactions does not exclude the continuation of a bullish further growth in the price of bitcoin, subject to a fall in the US dollar index.
As a reminder, OKEx is one of the cryptocurrency exchanges preferred by large cryptocurrency owners (whales).
In March, when the markets underwent a steep peak, OKEx recorded a daily inflow of over 4,000 bitcoins.
At the time of this writing, the price of bitcoin BTC / USDT is $ 11,597.
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