The devaluation of dollar, Bitcoin the best assets

By: Bharggavi Ssayee

March 29, 2021 1:34 PM

The massive dollar issue over the past year is Bitcoin's heyday, says a Soros Fund Management executive. Otherwise, cryptocurrency would undoubtedly have remained a marginal asset.

Sometimes crises are good. And the price of Bitcoin would be a perfect illustration of this. To support the economy, states are stepping up massive stimulus packages. This is particularly the case in the United States. And that translates into a massive dollar issue.

The "US dollar money supply grew by 25% in the last year alone," said Dawn Fitzpatrick, chief information officer of a major fund, Soros Fund Management.

A "really important moment" for crypto

This monetary policy is now allowing cryptocurrency, including Bitcoin, to reach an "inflection point." These crypto-assets directly benefit from the inflation of fiat currencies, the first of which is the dollar.

“I think for crypto in general, this is a really important time,” the expert told Bloomberg. The explosion in the money supply in the US has allowed Bitcoin to extricate itself from the category of marginal assets, he believes.

This situation justifies the Soros fund to invest in crypto infrastructure and in some of its companies. Very recently, Soros Fund Management took a stake in NYDIG ($ 200 million), but also Lukka ($ 53 million).

However, and like the Fed's Jerome Powell, Dawn Fitzpatrick does not see crypto as a threat to fiat currencies. Why ? Because cryptocurrencies are not even money.

Is the CBDC a threat to Bitcoin? In a "temporary" way

Bitcoin? “I don't see it as a currency, but as a commodity [Editor's note: commodity]. But it’s a commodity that is easily stored, easily transferred, ”says the Soros fund executive.

As a result, the launch of central bank currencies (CBDC or MDBC) should not impact Bitcoin. For the Governor of the Bank of Korea, Lee Ju-yeol, the CBDCs will indeed have the effect of lowering the demand for cryptocurrencies.

Yes… and no, judge on the contrary Fitzpatrick. "They want this [CBDC] to be used around the world, and it's a potential threat to Bitcoin and other cryptocurrencies." However, this threat would only be "temporary". So, "I don't think it will succeed in destabilizing Bitcoin for good," he concludes.