Cryptocurrency

Does the Coronavirus strengthen the dollar?

During the last few days have been informed about stimulus packages announced by western governments. Before this, most of the crypto influencer have commented on that in the near future we will see a depreciation in currencies such as the dollar. However, is it really the dollar will go wrong standing of this crisis?. The entrepreneur Blockchain, Vinny Lingham, believes that Coronavirus strengthen the dollar in our Tweet of the day today.

The dollar is needed against the Coronavirus

Since a few days, the main crypto influencers of the world have spoken so optimistic about the future of Bitcoin. Anticipating that the stimulus packages announced by the major governments of the world, increasing abruptly the liquidity of Fiat money, will lead to a scenario of inflation and currency depreciation which will benefit the Bitcoin. This prediction seems to have logic in the first place. After all, the increase unbridled of the monetary liquidity is the prime ingredient to unleash inflation. Since the money, like any other asset, it loses value if its supply increases too much without your demand to do the same. However, like every coin, has another point of view, but in this case the study from the point of view of the demand. Is the key to understanding the reason why the dollar will depreciated its value. Therefore, what is certain is that the u.s. currency today is the main active used in the international trade and finance. Therefore, compared to the stimulus package that have been prepared by the European Union and the united States, and soon to be announced other countries of the world, the global demand for dollars is going to increase strongly. In fact, it may happen that the crisis of the Coronavirus, and preventive measures, strengthen the dollar. So that, even in a scenario of emission unbridled of dollars, the u.s. currency could gain value. As he says Lingham retwitteando a New York Times article where it explains this process in detail:

“Even if the u.s. government prints 2 trillion dollars tomorrow, the dollar will probably strengthen”

This analysis contradicts to the most important analysts of the crypto market, and in addition would frustrate the principal hope of the crypto community, in an increase in the price of Bitcoin, due to the weakness of the Fiat money. Presenting a future where the u.s. dollar, instead of being weakened by the Coronavirus, he will come out stronger than ever.

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