Will the Corona Virus Strengthen the Dollar?
Economic stimulus packages announced by western governments have been reported in recent days. With that in mind, most crypto influencers have commented that we will soon see currencies like the dollar depreciate. Will the dollar really get out of this crisis badly? Blockchain entrepreneur Vinny Lingham believes that coronavirus will strengthen the dollar in our country Tweet from today.
The dollar is necessary against the corona virus
For a few days now, the world’s leading crypto influencers have been optimistic about the future of Bitcoin. Predicting that the incentive packages announced by the world’s major governments that abruptly increase the liquidity of Fiat funds will lead to an inflation and monetary devaluation scenario that will benefit Bitcoin.
This prediction initially appears logical. After all, the rampant rise in monetary liquidity is the first ingredient that triggers inflation. Since money, like any other commodity, loses value if its supply increases too much without its demand doing so.
However, like all currencies, it has a different point of view, in this case the study from the point of view of demand. It is key to understanding the reason why the dollar will not depreciate. The truth is that the U.S. currency is now the primary asset in international trade and finance.
Given the stimulus package that the European Union and the United States have prepared and that will soon be announced by other countries around the world, global demand for dollars will therefore increase sharply. In fact, the coronavirus crisis and its preventive measures can strengthen the dollar.
Therefore, even in a scenario of uncontrolled dollar spending, the US currency could gain in value. As Lingham comments, an article from the New York Times is retweeted detailing this process:
“Even if the US government prints $ 2 trillion tomorrow, the dollar is likely to get stronger.”
This analysis contradicts the main crypto market analysts and would also frustrate the crypto community’s main hope of increasing the price of Bitcoin due to the weakness of fiat money. We present a future in which the US dollar will emerge stronger than ever before, instead of being weakened by the corona virus.