Bitcoin (BTC) is inches away from getting the same boost that helped it reach $12,500 earlier this month, according to the data.
On August 28, the US dollar currency index (DXY), after losses caused by a speech from the Federal Reserve, returned to crucial lows.
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At the close of Friday’s edition, the DXY measured 92.28, its lowest level since August 19. At that time, the index had recorded years of decline; 92.17 marked the floor that defied the minimum prices since April 2018.
Safe havens, including Bitcoin, seemed to benefit all summer when the DXY fell; gold peaked at $2,075, while the BTC/USD reached a high of $12,500 two weeks ago.
As Cointelegraph Markets analyst filbfilb indicated on Friday, a repeat performance was now on the cards. Thursday’s speech by Federal Reserve Chairman Jerome Powell caused the DXY to fall after days of gains.
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The impact on the US dollar may, in fact, be the only significant outcome of an „uneventful“ policy change for Bitcoin that many had hoped for.
However, the implications for the rigidity of the fiduciary economy thanks to the Federal Reserve were much more severe.
„Today’s speech by Jerome Powell will be in the history books,“ tweeted Andy Yee, Visa’s senior director of public policy.
The Fed’s change is „good for the hardest assets,“ gold and BTC
For Real Vision CEO Raoul Pal, Powell’s words were confirmation that Bitcoin and gold would remain strong in the future, but Bitcoin would win for investors.
„I think they both rise over time in inflation or deflation,“ he told his Twitter followers.
„Most people don’t understand the latter, but, simply put, Powell has shown that there is ZERO tolerance for deflation, so they will do ANYTHING to stop it, and that’s good for the two hardest assets, gold and Bitcoin. Powell WANTS inflation.“
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Even before the speech, Bitcoin supporters saw the long-term consequences of the Federal Reserve’s policy.
For Saifedean Ammous, author of the popular book „The Bitcoin Standard,“ it was a matter of „time will tell“ for Bitcoin Up against „fiat.
„The reduction in the new supply of bitcoins clearly reduced the new sale in the market, so it has probably helped to keep the price high or prevent it from falling further,“ he said in the Podcast Unchained on Aug. 25.
„The quantitative easing of the central banks and the policy of helicopter money around the world and giving checks to everyone seems to have done the same for the stock market. Now, let’s wait and see the long-term effects of the two approaches.