For some analysts, a strong dollar damages cryptocurrencies. Here is an interesting analysis on the relationship of cryptocurrencies to the green currency.
While most crypto markets and their investor base are trying to understand the cause of the recent market flop cryptocurrency, only partially attenuated in the last few days, some analysts have formulated an interesting interpretation of the decline in the price of Bitcoin and altcoins, substantially blaming the strengthening of the US dollar.
Since the beginning of August, the cryptovalute market experienced a real roller coaster ride in terms of volatility. While the end of July seemed to have signaled a recovery in the market, and probably a bullish return for investors, the subsequent price action illuminated the sector with a different light.
Following widespread confidence that a Bitcoin Exchange Traded Fund had been able to get the go-ahead for the negotiation from the United States Securities and Exchange Commission (SEC), the market has made a good recovery, with Bitcoin able to rise above $ 8000 and maintain its position for a while. However, a series of events then led to a decrease in investor confidence, starting with the SEC's denial of the ETF proposed by Winklevoss Twins.
VanEck, based in New York, has long been the main candidate for approval for the creation of the first Bitcoin ETF in the world, but also witnessed a sharp setback of its projects with the decision to postpone the SEC choice from early August to late September. After reports of a delay and another potential denial of a regulated ETF, the bears pushed the Bitcoin price to $ 6000, with the altcoins reacting accordingly and recording double-digit losses on an area already heavily touched. from events. In addition to tracing the fact that the market weakened due to the SEC decision on a Bitcoin ETF, analysts also speculated that the trend of ICOs is negatively affecting the sector (ICOs are almost universally built on the basis of the ERC token). 20 of Ethereum).
For other analysts, such as eToro's senior analyst, Mati Greenspan, the cause is also to be found in the strengthening of the US dollar. “The United States is moving towards economic tightening and to avoid heavy inflation by taking measures that are strengthening the dollar. Since the US dollar is the global reserve currency, many smaller economies rely heavily on a stable exchange rate with the greenback. Likewise, given that the dollar is viewed as a stable store of value, there is not really much incentive for people to store their money in digital goods, "said Greenspan in a statement to CCN.
In short, also assessed that some analysts in the field of cryptocurrency considering digital currencies in stark contrast to the traditional fiat sector, the US dollar could in fact be the cause of the fall in the price of digital currencies.
