Financial market commentator Peter Schiff is one of Bitcoin’s staunch opponents, and his stance on the digital asset has not changed over time. But if his recent predictions come true, good things will happen for Bitcoin. Just before the end of 2022, he released his views on inflation and the US dollar, as well as the path ahead.
Increase in inflation and weakening of the dollar
In recent tweets, Schiff spoke about the current trend of inflation. According to his statements, the reduction of inflation will not be realized in 2023 and we are witnessing an increase in inflation this year. On the other hand, the strengthening of the dollar index is no guarantee for the continued upward trend of the dollar. He pointed out that at the end of 2022, the dollar index was at the bottom of its six-month figure and this condition will continue in 2023. In addition, 2023 will be one of the worst years for the dollar.
Regarding inflation, he also believes that with the weakening of the dollar, inflation will intensify. The reason for this will be the increase in consumer price indicators such as rent, taxes, water and electricity prices, and insurance premiums. Stocks that performed poorly in 2022 will continue to do so in 2023.
The advantage of this condition for Bitcoin
Bitcoin usually rises when the dollar weakens. When the dollar value index weakens, most investors turn to assets that hold better value over time. Normally, people’s default in such a situation is to buy gold, but considering the performance of Bitcoin in the last decade, it is a reasonable choice for investors.
A clear example of this claim is the devaluation of the dollar in 2021; when the dollar index was at its lowest value in three years. At that time, Bitcoin quickly entered an upward rally and reached its all-time high of $69,000 in November of the same year. This process also happened in 2017. Both times, the weakening of the dollar worked in Bitcoin’s favor and put the crypto market on an upward trajectory.
Others, such as correlation with the stock market, should also be considered. If the downward trend of the stock market continues, the growth of Bitcoin will also stop. Unless the correlation between crypto market and stock is broken.
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