Will COVID’19 Help Bitcoin Overpower the US Dollar?

Coronavirus—the Pandemic that broke out in late 2019 is leading to impose a lasting effect on the lives of people mentally and physically worldwide. The physical breakdown may be treated but a mental breakdown is likely to tear apart even further as the world economy crashes into pieces yet digging deeper than the 2008 financial crisis. Now this time the loss is such that the rich might not get richer but the poor are getting poorer as we hit one of the major blows of the global crisis.

Will this Pandemic Lead to Hyperinflation from Free Cash?

The pandemic has led all the investors to become naive as the stocks, assets, treasuries, oil, fiat currencies etc have lost their gaining opportunities. The flow of the money in the economy has come to a standstill and the Reserve planned to inject a $2 trillion stimulus along with a Fed Rate cut to keep the economy going while the world fights the outbreak of Pandemic. Are we inviting hyperinflation due to free cash or widely known as passive income?

However, if we dig into the financial loss of the present scenario, we have seen a massive selling pressure on the traditional yet most preferred investment avenues. With the growing fear of liquidity crunch, “Cash has become the King” and the Dollar has become the most demanded asset, an interchanging place with the safe-haven—Gold.

Well, it is hard to make people understand that the stimulus provided is not a desperate injection of money to spend foolishly. As the government prints Dollar Bills, the greenback is on the verge of dying and managing a stance between the demand and supply in the economy.

Broadening further on what Robert Kiyosaki, an American Businessman and author of an international bestseller “Rich Dad, Poor Dad” has been favoring and promoting Bitcoin over the past 2 days and to defeat, the greenback has been enjoying a great trust all around the world as the central medium of comparison and trust. However, the current scenario will lead the Dollar to lose its own worth if it collapses soon as a reserve currency. Thereby, he emphasized on “NOT SAVING” rather investing in metals or Bitcoin. Bitcoin seems to gain the spotlight when the other investment avenues lose charm.

Amidst all this, Bitcoin and many cryptocurrencies have maintained a strong support throughout, until the press time which shows that Bitcoin is now an embracing opportunity to invade. 

Technical Analysis to Support:

US Dollar Currency Index Chart

US Dollar Currency Index Chart

To rightly analyze the current demand scenario of the American Dollar, we see that the reserve currency is gaining strength against the basket of currencies after testing support below 100 and 99 in the last week of the previous month. With a growing number of fatalities all over the world, the respective regulatory government has been injecting money into the system which has led the index to hover around 100 gaining support from 50-day and 200-day moving average.

The RSI rightly shows the growing demand and pressure to survive from the hyperinflation as the government prints for an unstoppable supply to meet the demand. The other fiat currencies have lost their race as the US Dollar turns up to be the gainer. The question is how long will the greenback sustain amidst the free cash injection? As per Bitcoin future value predictions, Bitcoin is the investment of an hour as it has been drawing an uptrend well before the countries and the fiat knocked down.

This free cash stimulus makes us think and get to one fundamental reason against Kiyosaki’s thoughtful question: “Do we really need free money?” Well, while we think about it, we should rightly know that all the people in the economy do not belong to the same group of income earners. There are rich, poor and then the subdivisions within. Now, if we think rationally, will we accept free money and if we do, there has to be a just reason to spend as the economy will get better over the time leading to the old mantra of the rich becoming richer and the poor becoming poorer.

Bitcoin Price Chart 

Bitcoin Price Chart

On the other hand, if we just take a glance at the BTC price Chart against the US Dollar, we see a notable uptrend as the coin breaches above $7k with the nearest support from 50-day MA.

Mehak Punjabi

Mehak Punjabi is a post graduate in MBA with specialization in Finance and has joined CryptonewsZ with a skill building view in the world of cryptocurrency and blockchain. She is dynamic and a quick learner with a hold on financial analysis.

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