Bitcoin
‘Erosion by Stealth’ – IMF Issues ‘Stunning’ Warning of US Dollar Collapse as Fed Prepares Bitcoin, Ethereum and XRP for Crypto Price Boom
Bitcoin, along with other major cryptocurrencies, ethereum and XRP
XRP
soared even more this year (with an earthquake in China potentially poised to wreak havoc on the price of bitcoin).
The price of bitcoin has just had a $4 trillion “watershed moment” while Ethereum, XRP and Other Top Coins Are Preparing for a Wall Street Bomb.
Now, after the Federal Reserve quietly admitted that gold is replacing the US dollarThe International Monetary Fund (IMF) has warned of a “surprising” decline in the US dollar’s share of foreign reserves allocated by central banks and governments.
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The US dollar is suffering “stealth erosion”, according to the International Monetary Fund (IMF)… [+] as the Federal Reserve prepares for a new global liquidity cycle that could boost the price of bitcoin, ethereum, XRP and other cryptocurrencies.
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“Surprisingly, the reduced role of the US dollar over the past two decades has not been accompanied by increases in the holdings of the other ‘big four’ currencies – the euro, yen and pound,” said IMF economists Serkan Arslanalp, Barry Eichengreen and Chima Simpson-Bell wrote in a report.
“Instead, it was accompanied by an increase in the share of what we call non-traditional reserve currencies, including the Australian dollar, Canadian dollar, Chinese renminbi, South Korean won, Singapore dollar and Nordic currencies.” , they wrote, pointing to “new digital financial technologies such as automatic market creation and automated liquidity management systems” as drivers of this change.
“This recent trend is even more surprising given the strength of the dollar, which indicates that private investors have switched to dollar-denominated assets,” the economists added.
Earlier this month, the Federal Reserve Bank of New York wrote a report outlining the narratives around the “declining share of the dollar in official reserves and the increasing role of gold holdings by central banks”, which it says has been “inappropriately” generalized beyond “the actions of a small group of countries”.
However, some commentators disagreed with the New York Fed’s assessment of the situation.
“The Fed now admits that some countries are moving towards gold,” said technology investor and former Coinbase chief technology officer Balaji Srinivasan posted to X, pointing to what the Fed says is a “small group” that “represents 3 billion people. Therefore, 37.5% of the world is moving away from dollars towards gold.”
Former billionaire and All In podcast “best friend” Chamath Palihapitiya predicted that bitcoin could “completely replace gold” as countries adopt it –potentially pushing its market capitalization towards gold’s $15.7 trillion.
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The price of bitcoin has surged this year, as the Federal Reserve prepares bitcoin, ethereum, XRP and… [+] crypto for a potential boom.
Forbes Digital Assets
Meanwhile, independent 2024 US presidential rival Joe Biden and Donald Trump Robert F. Kennedy Jr. warned that the only way to save the dollar is with bitcoin.
The US dollar’s fall comes as the Federal Reserve prepares to cut interest rates after a two-year war on inflation, following historic Covid-era stimulus and money printing.
“Central banks around the world have already started cutting rates, which suggests a broader trend of monetary easing,” analysts at bitcoin and crypto exchange Bitfinex wrote in emailed comments.
Fed Chairman Jerome Powell indicated this week that the Fed will cut rates at least once this year, after the European Central Bank (ECB) moved to cut interest rates in the euro zone earlier this month.
“It seems clear that the Bank of England and Federal Reserve will follow suit in the coming months,” the Bitfinex analysts added. “The global liquidity cycle indicates that the money supply is likely to increase, which could support asset prices, including cryptocurrencies.”