This week, the Dollar Currency Index (DXY) tanked, allowing different monies and resources such as Bitcoin (BTCUSD) flourish against the generally dominant market force. The current collapse has prompted Goldman Sachs to question the dollar’s international reserve predominate. Would the suddenly surging cryptocurrency really be the reply to the dollar’s dwindling stronghold?
Money Debasement Fears Instant Questions Over Reserve Currency Reign
A group of Goldman Sachs analysts and strategists informed Bloomberg that international “debasement fears” enclosing the buck are mounting. Continuing stimulation efforts wasted global direction, and the bad result of the pandemic has diminished the once-powerful national money.
The group, such as top Goldman plans Jeff Currie, states there are “real concerns around the longevity of the US dollar as a reserve currency.”
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Currie and his analysts have produced bold forecasts before that have come true. A standout prediction produced by the Goldman head of commodity research pointed to petroleum costs tanking to $20 a cone.
The telephone has been made in September 2019. Months after the forecast, petroleum costs fulfilled that after believed overzealous goal amidst the quarantine before this season.
Currie and the group today point to gold as a possible “currency of last resort,” but they’re overlooking the more obvious alternative: Bitcoin.
Money Currency Index (DXY) / Bitcoin (BTCUSD) Comparison | Source: TradingView
Why Bitcoin Is a Better Answer Than Gold To Current Currency Chaos
As the dollar fell this week, Bitcoin, gold, and other assets trading against USD rose more sharply as a result. The deviation between BTCEUR and BTCUSD is significant due to the role the dollar played in the recent global market shakeup.
And while Goldman Sachs is recommending gold perhaps take the position of the dollar as the global reserve currency, Bitcoin is by far the better choice.
Goldman Sachs strategists have made wildly accurate calls in the past, but a recent report made headlines in the cryptocurrency world for getting it all wrong. The investment powerhouse released a scathing report calling cryptocurrencies like Bitcoin “not an asset class.”
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Immediately, the failure to recognize Bitcoin’s over 1,000,000% ROI from its climb from virtually worthless is apparent. But there are many other reasons that the crypto asset is a better choice than gold for replacing the global reserve currency.
Sure, paper notes could represent ownership backed by the precious metal as has happened in the past, the world is moving increasingly digital.
Gold exists in a physical form, and any digital means of holding gold involves other parties having custody of the asset. Bitcoin, however, lets you be your own bank and is a contactless solution in today’s post-pandemic world.
Bitcoin offers plenty more reasons beyond just that, including better divisibility, durability, transferability, and digital scarcity.
All of these attributes make the cryptocurrency a clear solution to all of the issues currently facing both gold and the dollar, making it the best answer to the question: what will replace the dollar as the global reserve currency?
Image Courtesy of Deposit Photos. Charts via TradingView.
on https://bitcoinist.com/ /goldman-sachs-questions-dollars-reserve-status-why-bitcoin-is-that the-response/