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‘Stealth erosion’: IMF issues ‘stark’ warning of US dollar collapse as Fed prepares Bitcoin, Ethereum and XRP for crypto price boom
Bitcoin, along with other major cryptocurrencies Ethereum and XRP
XRP
have soared this year (with China earthquake potentially poised to cause Bitcoin price chaos).
The price of Bitcoin just had a $4 trillion “watershed moment,” while Ethereum, XRP and other major coins prepare for a Wall Street bombshell.
NOW, after the Federal Reserve quietly admitted that gold was replacing the US dollarThe International Monetary Fund (IMF) has warned of a “striking” decline in the US dollar’s share of foreign exchange reserves allocated by central banks and governments.
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The US dollar is undergoing “stealth erosion”, according to the International Monetary Fund (IMF)… [+] as the Federal Reserve prepares for a new global liquidity cycle that could increase the price of bitcoin, ethereum, XRP and other cryptocurrencies.
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“It is striking that the reduced role of the US dollar over the past two decades has not been offset by an increase in the shares of the other ‘big four’ currencies: the euro, the yen and the pound sterling,” said IMF economists Serkan Arslanalp, Barry Eichengreen and Chima Simpson-Bell wrote in a report.
“On the contrary, this has been accompanied by an increase in the share of what we call non-traditional reserve currencies, including the Australian dollar, the Canadian dollar, the Chinese renminbi, the South Korean won, the Singapore dollar and Nordic currencies,” they wrote, pointing to “new digital financial technologies such as automated market making and automated liquidity management systems” as driving this change.
“This recent trend is all the more striking given the strength of the dollar, which indicates that private investors have turned to dollar-denominated assets,” the economists add.
Earlier this month, the Federal Reserve Bank of New York issued a report describing the discourse around “the decreasing share of the dollar in official reserves and the growing role of central banks in gold reserves”, which, according to him, have been “wrongly” generalized beyond “equities of a small group of countries.
However, some commentators disagree with the New York Fed’s assessment of the situation.
“The Fed is now admitting that some countries are moving into gold,” said Balaji Srinivasan, a tech investor and former Coinbase chief technology officer. job at Thus, 37.5% of the world’s population is moving away from the dollar and towards gold.
Former billionaire and All In podcast “bestie” Chamath Palihapitiya predicted that bitcoin could “completely replace gold” as countries adopt it.potentially pushing its market cap towards gold’s $15.7 trillion.
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The price of bitcoin has increased this year as the Federal Reserve launched bitcoin, ethereum, XRP and… [+] crypto for a potential boom.
Forbes Digital Assets
Meanwhile, Robert F. Kennedy Jr. (RFK Jr), independent rival of Joe Biden and Donald Trump for the 2024 US presidential election, has warned that the only way to save the dollar is to use bitcoin.
The US dollar’s decline comes as the Federal Reserve prepares to cut interest rates after a two-year war against inflation following historic Covid-era stimulus and money printing.
“Central banks around the world have already started cutting rates, suggesting a broader trend toward monetary easing,” analysts at bitcoin and cryptocurrency exchange Bitfinex wrote in comments sent by email.
Fed Chairman Jerome Powell indicated this week that the Fed would cut rates at least once this year after the European Central Bank (ECB) decided to cut interest rates in the Eurozone at the start of the month.
“It seems clear that the Bank of England and the Federal Reserve will follow suit in the coming months,” Bitfinex analysts added. “The global liquidity cycle indicates that the money supply is likely to increase, which can support asset prices, including cryptocurrencies.”