Bitcoin

The Americans exchange their devalued dollars for Bitcoin

A Bloomberg article claims that Americans are giving up dollar security on more speculative assets like stocks, gold, and Bitcoin (BTC).

High savings rates, low returns

Due to the COVID 19 quarantine, the personal savings rate in the United States is at an all-time high. However, The yield offered by financial institutions on savings accounts is close to zero. At the same time,Assets like Bitcoin, stocks and gold have seen double-digit gains since March.. That makes them one attractive option for investors.

Race down

The Americans exchange their devalued dollars for Bitcoin
The Americans exchange their devalued dollars for Bitcoin

Source: Bloomberg

The article mentions a 28-year-old Californian, who told the reporter that he will convert his $ 15,000 savings from his high-interest savings account at Ally Bank to Bitcoin. He says he’s doing it because it expects long-term economic stagnation.

July was the worst month for the USD in ten years

The reality is worse than the Bloomberg article suggests. It’s no secret that the dollar is rapidly depreciating against other leading fiat currencies. In fact, according to the Financial Times, July was the worst month for the dollar in ten years.

July 2020 Bitcoin and U.S. Dollar Index (DXY). Source: Trading Economics.

With another round of stimulus checks just around the corner and most of the nation still affected by COVID-19 restrictions, this problem can only get worse. Americans will most likely have more devalued fiat money in the short term, and may try to convert their savings into higher-yielding assets. However, there is no free lunch. In the investment world, high returns lead to high risks.

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