Bitcoin Price Could Rise If Fiat Currency System Collapses

Bittime - Arthur Hayes, BitMEX co-founder attributed potential of Bitcoin price increase to the possible collapse of the global fiat currency system. Hayes highlighted several factors that could push Bitcoin prices up.

Interest Rates and Impact on Bitcoin

One of Hayes' focuses is the interest rate differential between the US dollar and the Japanese yen. According to him, if the Bank of Japan (BOJ) and the Federal Reserve (FED) do not narrow the interest rate difference between the dollar and the yen, the market will continue to use leverage. 

This means market participants will tend to borrow money at low costs in yen to invest in assets that provide higher returns in dollars, a strategy known as the carry trade.

Carry Trade Strategy

Carry trade is a strategy that has long been used in the world of finance, where investors borrow in a currency that has a low interest rate and invest it in a currency or asset with a higher yield. 

However, this strategy also carries major risks, especially in the event of sudden changes in monetary policy or exchange rate fluctuations.

Hayes argues that if these interest rate differentials continue, markets will become increasingly trapped in leverage, which could trigger instability in the global financial system. 

In this scenario, Bitcoin could be one of the assets that benefits, given its decentralized nature and limited quantity.

Read Also: Fiat Currency Deposits Increase, Sign of a Bullish Trend?

Collapse of Fiat Currencies and Rise in Bitcoin Prices

Hayes stated that the collapse of the fiat currency system is one scenario that could push Bitcoin prices up significantly. The fiat currency system, which depends on public trust in the government and central bank, could experience severe pressure if the monetary policy taken is not in line with global economic conditions.

When confidence in fiat currencies begins to decline, investors tend to look for alternative assets that are not affected by monetary policy, such as gold or Bitcoin. 

Bitcoin Cannot Be Manipulated

Bitcoin, with its limited supply and unable to be manipulated by any government, could be an attractive option for those seeking refuge from economic uncertainty.

Hayes also added that the increasing liquidity of fiat currencies chasing assets with limited supply could be another factor pushing Bitcoin prices up. 

When more money chases a limited amount of an asset, the law of supply and demand applies, where an increase in demand without an increase in supply will push the price of that asset up.

Read Also: Potential Bitcoin Price Increase If Stablecoin Issuance Increases!

How to Buy Crypto with Bittime

You can buy and sell crypto assets in an easy and safe way through Bittime. over is one of the best crypto applications in Indonesia which is officially registered with Bappebti. 

To be able to buy crypto assets on Bittime, make sure you have registered and completed identity verification. Apart from that, also make sure that you have sufficient balance by depositing some funds into your wallet. For your information, the minimum purchase of assets on Bittime is IDR 10,000. After that, you can purchase crypto assets in the application. 

Monitor graphic movement price Bitcoin (BTC), Ethereum (ETH), Solana (SOL) and other cryptos to find out today's crypto market trends in real-time on Bittime.