Worsening US Dollar, Inflation Metrics Bode Well for Bitcoin’s Continued Rally

Summary (IA Generated)

Bitcoin’s price has nearly doubled in the past eight weeks, as several major publicly listed companies bought the cryptocurrency to hedge against an inflation-led decline in the value of their cash holdings.

Hedging demand for the cryptocurrency may now be set to rise further, with expectations for long-term inflation reaching 19-month highs.

The money supply-boosting policies adopted by the Federal Reserve to counter the coronavirus-induced slowdown have done much to fuel the rise in inflation expectations, as well as the devaluation, or debasement, of the dollar.

The Dollar Index, which tracks the greenback’s value against major currencies, is seen near 91.

00 at press time, a level last seen in April 2018, according to TradingView.

This year, institutions have increasingly poured money into bitcoin, strengthening its appeal as an inflation hedge.

The purchasing power of cash is debasing rapidly,” Nasdaq-listed MicroStrategy’s chief executive, Michael Saylor, told CoinDesk last month while explaining the rationale behind the company’s decision to buy bitcoin.

According to Saylor, bitcoin is a better store of value asset than gold.

Large sell orders near $20,000 and consistent dip demand have led to price consolidation, according to Patrick Heusser, a senior cryptocurrency trader at Zurich-based Crypto Broker AG.

Bitcoin is trading near $19,372 at press time, representing a 1.