“Bitcoin is New Gold on Crack,” with a Weak Dollar as a Tailwind

Deutsche says BTC is now seeing “increasing demand” to hedge dollar risk, inflation, and other things.

In 2020, bitcoin is strengthening its position as digital gold.

People have also started to favor Bitcoin over the traditional safe-haven asset, not just millennials but also the older generation.

In 2020, compared to Bitcoin’s 143% gains, gold has only risen a mere 22.7%. As for November, the bullion is down 0.48% while BTC had a rally of 26.6%.

Even Jim Reid Deutsche Bank notes that there “seems to be an increasing demand to use Bitcoin where Gold used to be used to hedge Dollar risk, inflation, and other things.”

In this quarter, especially after the US election and the news of the vaccine, there has been a “dramatic divergence” between precious metals, Gold (-3.6%) and Silver (-4.4%), and Bitcoin (+13.4%), noted Reid, who called it an oddity.

Bitcoin is “creating momentum of its own… up over 70% over the last six weeks as more and more investors are starting to see it emerge as a credible asset to invest in,” he added.


While some retail exposure is definitely here, this recent rally has been primarily driven by the whales as institutional money comes pouring in.

As Bitcoin proponent Michael Saylor, CEO of MicroStrategy, the first publicly-listed company to put BTC in its balance sheet, noted, “Given the challenge of how to invest $600 million in treasury reserves, after a lifetime of experience & months of analysis, I decided on an allocation of 100% Bitcoin, 0% Bonds, 0% Stocks, 0% Real Estate, 0% Gold. Seems rational to me.”

Yesterday, for the first time since mid-December 2017, Bitcoin reached nearly $18,500. BTC/USD has been trading around $17,820 in red, as of writing.

For digital gold, much like the yellow metal and other assets, a weak dollar also spells bullishness. Over the years, the US dollar and Bitcoin have been experiencing an inverse relationship.

While the dollar rose 16% from the low in early 2018 to the peak in March 2020, Bitcoin fell 75% during the same period. In contrast, since the March high, the dollar has fallen 10%, while Bitcoin has rallied 250%.

“Bitcoin is new gold on crack,” wrote Charlie Morris of ByteTree, who says a weak dollar is a tailwind.


According to him, the Dollar index has turned south in the longer-term with a death cross imminent. “Bitcoin is too young to have seen a decent dollar bear market and has thrived despite that. Now imagine what happens when the dollar really does start sinking,” he added.

After devaluing the US dollar in 2020, the Federal Reserve hasn’t given up its plan on it yet. Another stimulus package is to make an entrance as well.

“Bitcoin seems to be the hedge of choice against the U.S. dollar debasement that is looming, either through more Federal Reserve quantitative easing, higher government debt or a steepening yield curve — or all three,” wrote Jeffrey Halley, a senior market analyst with Oanda Asia Pacific Pte.

With the Fed expected to keep interest rates in the 0.00–0.25% range until 2024 and inflation is positive, this “translates into negative real short-term rates, leading to currency debasement for the foreseeable future,” said trader and economist Alex Kruger.

Bitcoin (BTC) Live Price

1 BTC/USD =18,981.7583 change ~ -1.54

Coin Market Cap

352.19 Billion

24 Hour Volume

42.11 Billion

24 Hour Change


Get Free Email Updates!

*Action* Enter Best Email to Get Trending Crypto News & Bitcoin Market Updates

I will never give away, trade or sell your email address. You can unsubscribe at any time.

AnTy has been involved in the crypto space full-time for over two years now. Before her blockchain beginnings, she worked with the NGO, Doctor Without Borders as a fundraiser and since then exploring, reading, and creating for different industry segments.

[Alert] Use the author's self-conducted information at your own risk, do you own research, never invest more than you are willing to lose.

[Disclosure] The published news and content on BitcoinExchangeGuide should never be used or taken as financial investment advice. Understand trading cryptocurrencies is a very high-risk activity which can result in significant losses. Editorial Policy \\ Investment Disclaimer


Please enter your comment!
Please enter your name here


Live Bitcoin Price & Latest BTC Charts

Today's Latest Crypto News

BitcoinExchangeGuide is a hyper-active daily crypto news portal with care in cultivating the cryptocurrency culture with community contributors who help rewrite the bold future of blockchain finance. Subscribe on Google News, see the mission, authors, editorial links policy, investment disclaimer, privacy policy. Got News? Contact us, we are human too. Note: nothing here is financial advice, do your own research thoroughly.

Start Using Crypto Today