Monetary policies across the world appear to be sending investors towards bitcoin, according to a Cointelegraph report. The USA cut the interest rate and the Chinese have devalued the yuan, plus the ongoing trade war between these two countries has caused turmoil in the stock markets. Many believe that all these factors have contributed to the recent rise in the price of bitcoin.
Economist Raoul Pal believes that investors are turning to gold, cash, government and now bitcoin as a hedge against further downturns. In a Twitter thread, the former Goldman Sachs executive makes the case for why the world is fast approaching a currency crisis, and he also suggested that bitcoin would be the survivor of any “monetary carnage.” Pal also warned, “We are at the most important juncture in FX markets in my entire 30 year career. The dollar appears at risk of an uncontrolled rise.”
Pal also addressed the issue of the ADXY (Asia Dollar) saying that it was on the verge of, “falling below a crucial trendline.” He added, “a fall of 20% or more across ALL Asian major currencies has brought the index face to face with the “cliff of death.”
Furthermore, JP Morgan’s Emerging Markets Currency Index is also looking somewhat the worse for wear and is on the verge of dropping to a new low.
Pal also noted that seven other fiat currencies are in danger of dropping in value and that a strengthening dollar is catalyzing a massive global deflationary wave, which could lead to a financial crisis. All this could be very bullish for the bitcoin price.
Pal concluded his views on the matter, posting, “Sadly, we are at one of the BIGGEST junctures for markets in history. You may disagree with my assessment of the odds. It doesn’t matter. But you simply CANNOT ignore the risk.”