US dollar as the world’s reserve currency is unlikely to fall, that`s why Bitcoin will suffer

The US dollar is expected to fall further, but analysts believe its role as the world’s reserve currency is unlikely to decrease, which may not be the best forecast for Bitcoin.

Although the us currency is falling, it remains a reserve currency

BlackRock Investment Institute says that the dollar’s weakness will continue in the near future, as many factors, including politics and the pandemic, will continue to play a role in the decline of the us currency. Blackrock strategists clarified:

The prospect that the dollar will maintain its supposed safe haven status is another problem. We are evaluating this as a contentious us presidential election is expected.

Against the background of the emergence of coronavirus in the United States, in March, investors turned to the dollar as a safe asset. The surge in investor reaction led to the dollar reaching its highest in three and a half years in March.

However, given the current weak response to coronavirus, strategists say the us economic recovery is in question. Reacting to America’s growing deficit and remaining low interest rates, the dollar fell to a 27-month low of 92.477 from a high of $ 102 in March. Patrick Savic of JPMorgan Asset Management said: Reducing the interest rate advantage makes the dollar less attractive, and encourages investors to consider deposits in other currencies. These cyclical factors will not change in a hurry, and the dollar probably has room to fall further.` Can a strong dollar destroy Bitcoin?

Although the us dollar has recently fallen to a new low, its slight 1.3 percent rise has led to a drop in Bitcoin and other major cryptocurrencies, as well as gold. The inverse correlation between the dollar and the Cue ball could potentially mean that the weakening of the dollar has led to numerous bull races of the PTS.

Jonas Goltermann, senior economist at research firm Capital Economics, said the dollar’s fall was “grossly exaggerated,“ and the reasons for the dollar index’s fall were not only due to the reserve currency’s status, but also other reasons.

Goltermann is of the opinion that the coronavirus pandemic has strengthened the role of the dollar as a key currency, since the dollar rose sharply as a safe haven asset in March when the coronavirus pandemic hit the US and Europe. He stressed that there is no obvious alternative to the dollar:

The next two largest economies, the Eurozone and China, are smaller than the US, and the Euro and yuan have significant disadvantages as reserve currencies.

Morgan Stanley also recently supported the dollar, calling it its safe haven asset of the year.

As both Bitcoin and gold have benefited from the weakening dollar, the world’s largest cryptocurrency is currently trying to reach the $ 12,000 level again. Other analysts believe that gold will continue its rally, which may give hope to bitcoin, as the two assets recently reached an all-time high in the average monthly correlation.