How the Dollar Affects Bitcoin and Other Cryptocurrencies

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by Giorgi Kostiuk

2 years ago

Real Vision’s chief crypto analyst, Jamie Coutts, suggests that the US dollar might obstruct the rise of Bitcoin and other digital assets. While he maintains a positive long-term outlook, Coutts emphasizes that the dollar's strength poses a short-term threat to Bitcoin.

The Dollar’s Influence on Bitcoin

Coutts notes that the macroeconomic environment has worsened, suggesting that a stronger dollar is detrimental to Bitcoin. He adds that the liquidity framework is sensitive to short- and medium-term momentum shifts.

The macro backdrop has deteriorated. The strength of the dollar is not good for Bitcoin.Jamie Coutts

The Current State of Bitcoin

Coutts believes there is a strong correlation between Bitcoin and global liquidity. He anticipates that despite short-term volatility, Bitcoin should continue to rise over the next one to two years, particularly with an increase in the M2 money supply.

Long-term, I’m at the point for this cycle; a 12-month forecast based on a linear relationship with liquidity.Jamie Coutts

Long-term Market Forecast

At the time of writing, Bitcoin (BTC) was trading at around $90,050. Investors closely watching the cryptocurrency market continue to monitor how the dollar’s strength may influence these markets.

In conclusion, Jamie Coutts notes that while the short-term strengthening of the dollar might negatively impact Bitcoin, a long-term growth of digital assets is expected, driven by increased liquidity.

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