Why Bitcoin can be a potential insurance against the financial crisis: report – Bitcoin (BTC/USD)
In the near future, Bitcoin BTC/USD may contrast sharply with the path that the rest of the world and fiat currencies may follow, especially that of increasing supply, creating additional currency, and growing the central bank balance sheet, according to Loyalty digital assets.
In the report “The rising dollar and Bitcoin“, the asset management company cited an example of UK., saying the central bank is tightening in an attempt to tackle decades-high inflation while dealing with tensions in markets that require more liquidity to dampen financial volatility and prevent it from spreading.
UK Investors Realize Bitcoin’s Potential
“Some UK investors or traders may have already noticed the potential for bitcoin to pull back from the current situation as trading volumes between the pound and bitcoin hit an all-time high,” Fidelity Digital Assets wrote.
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The report adds that the Federal Reserve may face pressure to reverse its monetary tightening policy soon due to the damage the U.S. currency is causing to other nations, which has a precedent based on the 1985 Plaza Accord. .
The huge indebtedness of developed countries could also necessitate further currency depreciation, and recent events in the UK have highlighted systemic counterparty and liability risks, necessitating monetary intervention and liquidity injections that do not occur. likely won’t happen anytime soon, according to Fidelity Digital. Assets.
Bitcoin does not correspond to the liability of others
“Comparatively, Bitcoin remains one of the few assets that does not match the liabilities of others, has no counterparty risk, and has an unchangeable supply schedule. It ultimately belongs to investors and the market to decide if these properties are starting to look more attractive,” Fidelity Digital Assets said.
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