Macroeconomic Specialist Luke Grome, Gold and Bitcoin $107,078.29drew attention to the potential of gaining value. Capital controls and new trade war steps that the US may implement can trigger investors’ search for safe ports. According to Gromen, serious breaks may be experienced in the reserve money status of the dollar. This can increase the demand for alternative assets such as gold and Bitcoin.
Capital controls can weaken US dollars
According to Grome’s assessments, the US’s possible capital controls may change balances in financial markets. Capital controls are known as economic measures taken to limit the output of money from the country. Such applications may damage investor confidence and reduce the global attractiveness of the US dollar. The decrease in the charm of the dollar as a reserve money can direct investors to alternative assets.
Grome says that currencies of other major economies such as China and Europe cannot fill this gap. Because investors look at the bonds of these countries. At this point, gold and Bitcoin come into play. It is emphasized that gold, which is a physical being, can come to the fore again, as in the past crises. Bitcoin stands out as a reflection of confidence in decentralization with its digital structure.
Interest decrease and market fluctuations are expected
Gromen’s analysis includes not only the tendency to safe ports, but also the tremors that can be experienced in the markets. According to him, it may be inevitable that the US Federal Reserve (FED) will be reduced to interest rates. In this process, it is thought that breaks in the bond market may be experienced and that stocks may suffer serious value. Such a table may require the Fed and the Treasury to intervene again.
Gold and Bitcoin are expected to get out of this process. Because investors prefer to turn to beings that will protect their value in uncertainty environments. However, this transition period may not be easy. In this financial shaking process, where social and political unrest may also accompany, market players must be prepared for sudden price changes. According to Gromemen, although such mobility creates chaos in the short term, it can open a door to a more stable economic model in the long run.
Responsibility Rejection: The information contained in this article does not contain investment advice. Investors should be aware that crypto currencies carry high volatility and thus risk and carry out their operations in line with their own research.
