With the US economy slowing, many are looking to Bitcoin as the next big safe haven, much like gold did in the 1930s. As US economic data continues to decline, many have begun to speculate on how cryptocurrencies, especially other cryptocurrencies, will impact the global economy. Bitcoinwill react to this perfect storm that is brewing.
Popular analyst Michael van de Poppe says Bitcoin could follow the historical bull run of gold during the Great Depression.
With the US debt, inflation and rising interest rates on the rise, Bitcoin is increasingly being viewed as a hedge against economic uncertainty. Van de Poppe believes that Bitcoin will see a final rally very soon and that it will be sustained by lower interest rates and quantitative easing policies.
the #Bitcoin The mutation is near
It’s natural. The four-year cycle happens like any other cycle, but this one is as important as the gold cycle of the 1930s or the gold cycle of 1930. https://t.co/GoodB359DI Bust in 2000.
impact Bitcoin It will be huge in the next period… pic.twitter.com/ZARsWX4qf8
— Michael van de Poppe (@CryptoMichNL) September 5, 2024
Comparisons to the gold standard
The gold analogy is not far-fetched. During the 1920s, gold was still on the gold standard, but once the economy collapsed in the 1930s, the precious metal soared in value. That may be exactly the case with bitcoin today. Van de Poppe insists that bitcoin’s four-year cycle is still intact, just as gold has gone through a predictable series of cycles during economic turmoil.
BTC market cap currently at $1.07 trillion. Chart: TradingView.com
The global economic landscape is changing, with the US national debt surpassing $35 trillion, the Federal Reserve trying to raise interest rates while not continuing to fight inflation, and most countries, including China, reducing their investments in the US dollar. This could weaken the dollar’s current grip on the world, pushing more investors towards alternative assets like Bitcoin.
Bitcoin: Is There a Bullish Rally on the Horizon?
But Van de Poppe is not the only one who is very bullish on Bitcoin. According to him, US economy Bitcoin will be poised for one last massive rally long before the financial crisis. The Fed’s interest rate cuts later this month will be a last-ditch effort to keep the economy afloat. In fact, they could actually send Bitcoin soaring instead.
Image: IIFL Finance
In these uncertain times, investors are turning to hedging assets like gold and Bitcoin. These assets have performed exceptionally well during economic downturns. In light of this thinking, Van de Poppe expresses the growing trend of analysts looking at Bitcoin as a modern-day store of value.
The End of the US Dollar’s Dominance
The weakness of the US dollar is perhaps one of the biggest factors driving interest in Bitcoin. With inflation rising and interest rates rising, holding cash is no longer attractive. This seems to have translated into a shift in how individuals and institutions hold their portfolios. Van de Poppe also mentioned how other currencies like the Japanese yen and the euro have strengthened as the US dollar has shown weakness.
Featured image by Pexels, chart by TradingView