[2020-03-19] Bitcoin Rallies as Fiat Currencies Drop Against the U.S. Dollar

[blacky90]

After a major market crash last week, bitcoin (BTC), the most popular cryptocurrency, at least today is somewhat showing its power as a hedge against risks inherent in fiat currencies and the broader financial system.

Trading up 12% over the past 24 hours as of press time (USD 5,772 at 12:41 PM UTC), bitcoin is one of a few bright spots as the carnage continues in both the stock market and the foreign exchange market.

Over the past few days, we have witnessed what can be described as a meltdown in several fiat currencies, as measured against the U.S. dollar. Among these is the euro, the Australian dollar, the Canadian dollar, and many smaller currencies such as the Norwegian krone, which have all seen historic sell-offs against the U.S. dollar.

https://cryptonews.com/news/bitcoin-rallies-as-fiat-currencies-drop-against-the-u-s-doll-6071.htm

[cr1776]

The halving is coming. Hopefully 6-8 weeks before that things start looking up for virus related news and the combination could be tremendous. The virus fight is key though.

[desertfox470]

The halving is coming. Hopefully 6-8 weeks before that things start looking up for virus related news and the combination could be tremendous. The virus fight is key though.

I agree, I think we need good virus news and global economy news to get the price of bitcoin to be right when the halving comes. It is noce to see a increase in bitcoin trading, but the price also took a hit before that.

[bbc.reporter]

Every country is running to hide and hold their value on the United States dollar. Why is this? It is an inflationary currency controlled by evil people that is not deserving to be considered safe money.

[Betwrong]

To be honest, I'm very surprized by this big drop of British Pound and Australian dollar against USD:



What can be the reason for that? Do people think that the United Kingdom and Australia are going to "print" more money to fight the coronavirus impact on their economies than the America's central bank?

[hatshepsut93]

Bitcoin's recent price increase isn't tied to whatever is happening with fiat, it's just a correction after falling too much. I think sub-$6,000 prices are completely unjustified, since it's below the previous support levels and the market wants to be bullish because of halvening (it already had two small rallies).

Bitcoin isn't tied to every smallest market move of fiat or stocks, it's only affected when there are large shifts, like the recent stock market crash.

[bbc.reporter]

To be honest, I'm very surprized by this big drop of British Pound and Australian dollar against USD:



What can be the reason for that? Do people think that the United Kingdom and Australia are going to "print" more money to fight the coronavirus impact on their economies than the America's central bank?

I reckon there is speculation that the American private sector and its supply chains are more equipped and ready to fight the negative economic effects of the coronavirus.

Also, their economy might be more productive in this fight. There will be no toilet paper shortage hehehe.

[hv_]

This is quite common sence in fiat-world  / fx trading  for years now

The race to the bottom

Now, the FED has pumped and started the engines - to finally win

USD will drop to 0, but when will that phase transition (of trust) will go like described in phyiscs ? Second order singularity?

[Betwrong]

This is quite common sence in fiat-world  / fx trading  for years now

The race to the bottom

Now, the FED has pumped and started the engines - to finally win

USD will drop to 0, but when will that phase transition (of trust) will go like described in phyiscs ? Second order singularity?

I feel like you imply something interesting here, but, unfortunately, I can't get it.

Imo if FED were "issuing" 1 trillion new USD per day, it would take around 3 years until purchasing power of USD would drop by 50%. And still it would be far from being zero.

My estimates are based on this fact:

There is approximately US $37 trillion in circulation: this includes all the physical money and the money deposited in savings and checking accounts.
Money in the form of investments, derivatives, and cryptocurrencies exceeds $1.2 quadrillion.

But what do you think? Can USD purchasing power drop to zero much earlier?

Also, let's imagine it equals zero. What do you mean by the "second order singularity" in that case?

[hv_]

This is quite common sence in fiat-world  / fx trading  for years now

The race to the bottom

Now, the FED has pumped and started the engines - to finally win

USD will drop to 0, but when will that phase transition (of trust) will go like described in phyiscs ? Second order singularity?

I feel like you imply something interesting here, but, unfortunately, I can't get it.

Imo if FED were "issuing" 1 trillion new USD per day, it would take around 3 years until purchasing power of USD would drop by 50%. And still it would be far from being zero.

My estimates are based on this fact:

There is approximately US $37 trillion in circulation: this includes all the physical money and the money deposited in savings and checking accounts.
Money in the form of investments, derivatives, and cryptocurrencies exceeds $1.2 quadrillion.

But what do you think? Can USD purchasing power drop to zero much earlier?

Also, let's imagine it equals zero. What do you mean by the "second order singularity" in that case?

Afair a first order singularity is a hard change described by a step function like 1 -> 0 for a given value in time / temperature... but that is some ideal model that doesn't exist in real world, so that smoothes out to a Dirac function that has not a ideal singularity, but sth more realistic. To describe a real point (in time or pressure) temperature of trust in the USD is quite near I bet, and the FED does a lot that the house of cards is overloaded and trust crashes soon as domino bricks

[Betwrong]

This is quite common sence in fiat-world  / fx trading  for years now

The race to the bottom

Now, the FED has pumped and started the engines - to finally win

USD will drop to 0, but when will that phase transition (of trust) will go like described in phyiscs ? Second order singularity?

I feel like you imply something interesting here, but, unfortunately, I can't get it.

Imo if FED were "issuing" 1 trillion new USD per day, it would take around 3 years until purchasing power of USD would drop by 50%. And still it would be far from being zero.

My estimates are based on this fact:

There is approximately US $37 trillion in circulation: this includes all the physical money and the money deposited in savings and checking accounts.
Money in the form of investments, derivatives, and cryptocurrencies exceeds $1.2 quadrillion.

But what do you think? Can USD purchasing power drop to zero much earlier?

Also, let's imagine it equals zero. What do you mean by the "second order singularity" in that case?

Afair a first order singularity is a hard change described by a step function like 1 -> 0 for a given value in time / temperature... but that is some ideal model that doesn't exist in real world, so that smoothes out to a Dirac function that has not a ideal singularity, but sth more realistic. To describe a real point (in time or pressure) temperature of trust in the USD is quite near I bet, and the FED does a lot that the house of cards is overloaded and trust crashes soon as domino bricks

Well, I thought by singularity you meant something like this

In mathematics, a singularity is in general a point at which a given mathematical object is not defined, or a point where the mathematical object ceases to be well-behaved in some particular way, such as the lack of differentiability or analyticity.

in the sense that when the trust in USD would become zero something unpredictable could happen, a  phenomenon that could not be described and explained by the laws of economics. And, being an optimist, I thought it could be a good thing, it could be something that helped the world economy to rise to unprecedented heights.