The Impact of the Dollar Milkshake Theory on Crypto

[Suba]

In the global economy, the USD is not just a currency for transactions such as BND, SGD, IDR, etc., but the USD is a very strong foundation and dominates the world's financial markets. so that it can affect currency liquidity in almost all countries.When the United States raises its benchmark interest rate, which aims to reduce inflation, and reduce the amount of USD in circulation, the result can reduce commodity prices including crypto so they don't skyrocket. The market cap of the crypto market tends to fall, the flow of sales is high, so we call this condition Crypto Winter. Chances of a recovery in crypto prices will largely depend on the Fed. What do you think?

 

[Golden9]

There will be a point where the Fed will have to stop raising the interest prices. Bitcoin and other coins might rally then of people consider them as a hedge against the inflation.

 

[Suba]

The Fed always tries to increase interest rates to fight inflation in the United States, they also stop buying government bonds which will ultimately strengthen US bond yields, and automatically the value of the USD currency will also strengthen. Many investors convert their investment instruments into USD.

 

[Golden9]

I do convert my savings to USDT here in Nigeria because of the inflation too. The currency is also continuously being devalued against the dollar, so it serves as a nice hedge for long term savings.

 

[Suba]

it doesn't matter, if you have converted crypto to USDT to avoid inflation, because now crypto prices will continue to fall due to SEC pressure, If the USD gets stronger then it can be used as a hedge.

 

[Smalto]

I do convert my savings to USDT here in Nigeria because of the inflation too. The currency is also continuously being devalued against the dollar, so it serves as a nice hedge for long term savings.

That's a very commendable action, nothing beats investing or saving your money into USDT right now because it will do you a favour in the long run.

 

[Suba]

I'm afraid the Fed and the SEC will continue to put pressure on the crypto world so that the price of the cypto will plummet, so for now it will be better to hold USD or stablecoins.