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Despite initial expectations of a robust rally, major cryptocurrencies Bitcoin (BTC), Ethereum (ETH), and <\/span>XRP <\/span><\/a>have encountered a slowdown in momentum following a promising start in 2023. However, a prominent tech company\u2019s leaked disclosure can alter this trajectory.<\/span><\/p>\n With the <\/span>Federal Reserve<\/span><\/a> (Fed) grappling with a staggering $33 trillion US \u201cdebt death spiral,\u201d investment banking firm Jefferies analysts have warned that the Fed may be compelled to restart its money printing presses.\u00a0<\/span><\/p>\n This move could trigger the collapse of the US dollar and ignite a significant price boom for Bitcoin, rivaling the value of gold.<\/span><\/p>\n A recent Forbes <\/span>report <\/span><\/a>indicates that Bitcoin\u2019s highly anticipated halving event, expected to cause price volatility, is imminent.\u00a0<\/span><\/p>\n Christopher Wood, Jefferies\u2019 global head of equity strategy, emphasized in a note to clients seen by CNBC that G7 central banks, including the Federal Reserve, are unlikely to withdraw from unconventional monetary policies smoothly.\u00a0<\/span>Notably, Wood considers Bitcoin and gold as \u201ccritical hedges\u201d against the resurgence of inflation.<\/span><\/p>\n Since spring of 2022, the Federal Reserve embarked on reducing its ballooning balance sheet of nearly $9 trillion, which expanded significantly during the COVID-19 pandemic and subsequent economic downturn.\u00a0<\/span><\/p>\n This process, known as quantitative tightening, involves draining liquidity from the financial system and shifting the burden of newly issued debt onto the private sector.<\/span><\/p>\n In addition to balance sheet reductions, the Fed has implemented rapid interest rate hikes to rein in soaring inflation. However, this approach has raised concerns about a potential counterproductive \u201cdeath spiral\u201d for the US dollar, potentially bolstering the value of Bitcoin.\u00a0<\/span><\/p>\n Wood suggests that the Fed may be forced to adopt a more accommodating stance in response to a <\/span>US recession<\/span><\/a>. This shift would occur due to a larger-than-usual lag in the Fed\u2019s interest rate hikes aimed at curbing inflation following the significant expansion of the money supply in 2020 and 2021.\u00a0<\/span><\/p>\n Wood further explains:\u00a0<\/span><\/p>\n Such a failure to exit from unorthodox monetary policy in a benign manner is likely to culminate in the collapse of the US dollar paper standard to the benefit of both gold bullion owners and also owners of Bitcoin. Meanwhile, Bitcoin, along with Ethereum and XRP to a lesser extent, has witnessed a surge in institutional interest, driven by the world\u2019s largest asset manager, BlackRock.\u00a0<\/span><\/p>\n<\/blockquote>\n The CEO of <\/span>BlackRock<\/span><\/a>, Larry Fink, who had previously expressed skepticism towards Bitcoin, made a notable shift in June. Fink\u2019s endorsement of Bitcoin sparked a rush among Wall Street investors toward cryptocurrencies.\u00a0<\/span><\/p>\n With custodian arrangements in place for digital assets, Bitcoin has gained credibility as an investable option for institutional investors, presenting itself as an alternative store of value to gold.\u00a0<\/span><\/p>\n In conclusion, the Federal Reserve\u2019s monetary policy challenges and the growing <\/span>institutional interest <\/span><\/a>in Bitcoin and other major cryptocurrencies have created a perfect storm, propelling their prices to new heights.\u00a0<\/span><\/p>\nExpert Advocates For Bitcoin As An Inflationary Safeguard<\/span><\/h2>\n
US Dollar Caught In \u2018Death Spiral\u2019\u00a0<\/span><\/h2>\n
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