We are yet to cap off 2023 but there are warnings that the coming year does not bode well for the US dollar. That depends on which side you’re on when the countdown is over though, because 2024 could be a profitable opportunity for Bitcoin (BTC) holders and the overall cryptocurrency community.
The Recipe for Disaster
More financial analysts are now voicing their concerns over the stability of the US dollar primarily due to the USA’s looming recession, political uncertainty, and ballooning debt. These are aggravated by the growing threat of the Digital Yuan and Digital Euro in the USD’s global dominance.
Recession
US inflation has been at its highest for over four decades. If there’s any consolation, however, the government’s money printers are showing signs of cooling down as evidenced by the 3.7% to 3.2% inflation decline from September to October data. It is estimated to be further tempered in the November data to be released on Tuesday. But then again, JPMorgan is convinced that the recession was only “delayed rather than diminished.”
Politics
The nation is also showing a lot of division with the different political views at play as the US Presidential Election is scheduled on November 5, 2024. Former President Donald Trump is staging a comeback to challenge President Joe Biden. However, with the former’s ongoing cases, crypto supporter Vivek Ramaswamy and CBDC critic Ron DeSantis are hoping to capitalize on the outcome. In the middle is Bitcoin advocate Robert F. Kennedy, Jr. who’s looking to provide an alternative for those already fed up with the past two administrations.
We are still 11 months away, but the staging ground is about to get bloodier than it already is as the election nears its climax. After that, the country would then have to brace itself for a new economic landscape if Biden is kicked out of the White House.
Debt
US debt exceeded $33 trillion for the first time in history because of the increase in government spending. Among the factors blamed for the increase are the country’s continuing post-pandemic relief programs, foreign funding efforts, and political opposition to some of the administration’s proposed tax policies.
CBDC Threat
Both the European Union and China are doubling down on their central bank digital currencies (CBDCs), as shown by the development of their pilot operations. Despite this, Coinbase CEO Brian Armstrong believes the two financial instruments are far from ready to be a viable alternative to the US dollar. Thus, the crypto exchange honcho stated that Bitcoin holds the key to “extending Western civilization.”
Bitcoin Bulls Stampede
The mentioned scenarios, which could affect the US dollar, will likely reinforce the concept of Bitcoin as a hedge against financial and geopolitical uncertainties going into 2024. Since its advent, the most dominant crypto in the market has been driven by narratives likening it to gold, hence, its moniker “Digital Gold” in its early days.
Meanwhile, CoinShares Research Associate Luke Nolan said Bitcoin could skyrocket to $70,000 by the end of 2024 in an email to Forbes. The expert’s conservative estimate is anchored on the hope that the easing of financial conditions turns out as expected and rate cuts are implemented mid-next year combined with an increase in global liquidity.
On the other hand, the rumor mill has it that the US government may be cooking a Sovereign Wealth Fund BTC Investment. Crypto personality Luke Broyles claimed its position could dwarf MicroStrategy Chief Michael Saylor’s holdings by 671 times.
Furthermore, Jefferies’ analysts posit that the Federal Reserve may debase the US dollar in 2024. This could boost Bitcoin prices by an extra mile.
Lastly, let’s not forget the two Bitcoin milestones coming up. The Securities and Exchange Commission (SEC) is set to decide on the fate of Bitcoin exchange traded funds (ETFs) by January and Bitcoin halving is occurring in April.