According to the data, Bitcoin (BTC) is getting closer and closer to the same push that helped it reach $12,500 at the beginning of the month
On August 28, the U.S. dollar index (DXY), reduced by the losses caused by an announcement by the Federal Reserve, revisited decisive low levels.
The factor that brought Bitcoin above $12,000 re-emerges
At the time of writing, DXY is at 92.28, the lowest value since August 19, after the index has seen years of decline. The level of 92.17 marked the lower limit of the decline, testing important lows dating back to April 2018.
Shelter assets, including Bitcoin, seem to have taken advantage of the DXY fall during the summer. Gold reached highs of $2,075, while two weeks ago BTC/USD reached $12,500.
As reported on Friday by Cointelegraph Markets filbfilb analyst, now there seems to be the possibility of a replica. On Thursday, Fed President Jerome Powell’s speech plunged DXY after days of growth.
The impact on the U.S. dollar could in fact be the only significant consequence of the announced change, considered a „non-event“ for Bitcoin, as many had already predicted.
However, the implications for the rigidity of the fiat economy have been much more serious, so much so that even some figures in the traditional trading landscape have begun to promote Bitcoin.
„Jerome Powell’s speech will make history books,“ tweeted Andy Yee, senior director of public policy at Visa.
„Never in human history have so few stolen so much from so many. Free yourself with Bitcoin.“
Monthly chart of the U.S. dollar index
The Fed maneuver is „good for hard assets“ like gold and BTC
According to Raoul Pal, CEO of Real Vision, Powell’s intervention confirmed the strength of Bitcoin and gold in the future, but cryptocurrency will prevail for investors.
„I believe both assets grow during periods of inflation or deflation,“ he explained to his Twitter followers.
„Many do not understand the second case. Simply put, Powell has shown zero tolerance for deflation, so the Fed will do EVERYTHING to stop it, and that’s good for the stronger hard assets: Gold and Bitcoin. Powell Wants Inflation.“
Even before the announcement, Corona Millionaire supporters were looking at the long-term consequences of the new Fed maneuver.
Saifedean Ammous, author of the famous book „The Bitcoin Standard,“ said that time will reveal the winner in the conflict between Bitcoin and fiat.
„The reduction in Bitcoin’s new offering has clearly dampened the market sale, probably helping to keep the price high or preventing it from going down more,“ he explained on August 25th on the Unchained Podcast.
„The quantitative easing of central banks and the policy of distributing money to everyone seems to have done the same for the stock market. Now, let’s see the long-term consequences of the two approaches“.