Euro reaches parity with the US Dollar...Is it good or bad for Bitcoin?

[Abiky]

The FED's hawkish measures have made the USD stronger over the past days. However, the Euro has been showing signs of "weakness" as it nears parity with the US Dollar. With 1 EUR being worth (or close to) 1 USD, there will be no difference in exchanging Bitcoin to one of these leading Fiat currencies.

Sometimes I wonder what will be the implications of Bitcoin's price within the short term with both currencies (USD and EUR) in parity with one another. Will this lead BTC towards short-term gains or will everything else remain the same? Also, do you think the EUR parity with the USD is only temporary? If not, why? Your input will be greatly appreciated. Thank you very much.

[Husires]

Forex traders rarely change their investments, meaning if the euro falls, they will buy more of it or buy Pound sterling, Japanese yen, Swiss franc and others, but they rarely go to gold, real estate or other investments, including bitcoin, so everything that happens in the currency market will not affect the bitcoin.

The effect may be on the price of bitcoin in the euro because I believe that most trading pairs are in bitcoin and therefore the increase in the price of bitcoin against the euro will be logical.

[Z-tight]

Here is a link to the news for members that have not seen it yet, this one also contains ways travellers can benefit from the parity:
https://www.cnbc.com/2022/07/12/euro-and-us-dollar-near-parity-heres-what-that-means-for-travelers.html

On that, with crazy inflation levels these things do not even come as a surprise any longer, needless to say that neither of the currencies are doing very good, as they are both having a hard time with inflation, but the Euro is in the news because it is over 20 years since it was on par with the U.S Dollar, causing its current decline to be worth pointing out. Check out one of the reason why, with some positives for the U.S lately that made the parity possible:

Triggers for the relative decline of the euro include the ongoing war in Ukraine, which has fueled fear of an energy crunch and recession, as well as U.S. interest rates moving sharply higher, pushing investors toward the dollar and from the euro.

Sometimes I wonder what will be the implications of Bitcoin's price within the short term with both currencies (USD and EUR) in parity with one another. Will this lead BTC towards short-term gains or will everything else remain the same? Also, do you think the EUR parity with the USD is only temporary? If not, why? Your input will be greatly appreciated. Thank you very much.

There will be no implication for bitcoin, this isn't something to cause any short-term gains or plunge, and we are in a bear market, if it were to be a bull market, then it might have had one implication or the other. The longevity of this parity will depend on both the European central bank and the Federal reserve system, either of them that makes the better economic decision and policy will have their currency on top, they are the ones that can affect or decide how long the parity lasts.

[Upgrade00]

Sometimes I wonder what will be the implications of Bitcoin's price within the short term with both currencies (USD and EUR) in parity with one another. Will this lead BTC towards short-term gains or will everything else remain the same?

Imo, would not make much difference.
EUR accounts for a little or Bitcoin trades when compared to USD and so the drop in the € due to inflation and economic crisis would not have much of an impact on the Bitcoin price.
Over the years, Bitcoin has been little affected by the price changes of the top currencies, which is what makes it an ideal hedge against inflation.

Also, do you think the EUR parity with the USD is only temporary? If not, why?

It's important to note that the parity is due to the decline in the EUR as a result of economic challenges faced by European nations, from the fallout of covid19 to the oil and gas crisis caused by the current war in Ukraine.
Economies change overtime, so I'll say it's only temporary, but can't predict how long before things turn upwards.

[Gyfts]

What's even more bizarre is that on top of Euro reaching parity with USD, USD inflation still isn't stopping. New CPI has the USD inflation rate at 9.1 percent. The interest rate hikes aren't reflected in this report, nor are lowering energy costs, but it still is absurd that nearly 10 percent of the value USD holders had a year ago was lost. There aren't many stable currencies left, which is unironically "good for Bitcoin."

[tabas]

I do think that this is temporary, it's the same with the crypto market that going down is forever so changes will happen also but we don't know when.
But knowing if this is good or bad for bitcoin, I can't really tell. Although one thing is proven for bitcoin, whatever is the crisis that the world is facing, it remains strong. I guess for those that are into forex trading, the advantage is on them and they know how to react on this parity.

[Hydrogen]

Sometimes I wonder what will be the implications of Bitcoin's price within the short term with both currencies (USD and EUR) in parity with one another.

Also, do you think the EUR parity with the USD is only temporary? If not, why? Your input will be greatly appreciated. Thank you very much.

EUR and USD price trends shouldn't affect bitcoin value at all. Market mechanics have not exerted a noticeable effect on bitcoin value in a long time. The overwhelming majority of btc price trends are defined by big dollar, high liquidity, speculation.

The united states has amazon, google, microsoft, apple and other global giants acting as intrinsic value to back its native fiat currency.

The euro lacks that type of backing. Whether we're looking at commodities, raw materials, or corporate assets. The eurozone simply lacks those types of assets.

If the outcome is defined by market mechanics, I would expect the american dollar to retain greater value in contrast to the euro. But with such a high proportion of trading volume and prices being set by speculators. There is a chance that buy and sell orders will define the outcome, rather than market conditions.

[Abiky]

What's even more bizarre is that on top of Euro reaching parity with USD, USD inflation still isn't stopping. New CPI has the USD inflation rate at 9.1 percent. The interest rate hikes aren't reflected in this report, nor are lowering energy costs, but it still is absurd that nearly 10 percent of the value USD holders had a year ago was lost. There aren't many stable currencies left, which is unironically "good for Bitcoin."

The US Dollar is losing its luster as inflation soars like there's no tomorrow. If I'm not mistaken, USD has a higher inflation rate than the EUR. It's possible the Euro will end up being a stronger currency than the Dollar in the long run as the latter continues to lose traction. How will this impact Bitcoin's price, is yet to be seen. I'm guessing the number of stablecoins on the market will diminish over time due to tightening regulations from mainstream governments. What really matters is Bitcoin's usefulness as a currency (not as an investment tool). As long as it stays decentralized, it won't be going anywhere soon. Just my opinion

[Sithara007]

As long as the US Dollar remains as the reserve and trade currency of the world, it will be having an unfair advantage over the other currencies. They are able to sell their debt at extremely low interest rates of 1% to 1.5% per year. China and Japan currently have trillions of USD worth of US treasury bonds in their reserves. On the other hand, if a country such as India need to borrow money, then they need to offer a much higher interest rate. The BRICS nations have now proposed to come up with a different system for international trade. Let's see how it goes.

[Don Pedro Dinero]

I believe it is neither good nor bad for bitcoin. What I did hear on the radio yesterday is that the euro has not only depreciated against the USD, it has depreciated against 14 of the 15 most traded currencies, with the exception of the Danish krone. So it is an objective fact that the euro is weakening.

Regarding bitcoin, I think it will appreciate vs the USD and fiat currencies but I think we have some time left to be bored with the price. I don't expect any big moves at least until September and no great joy for us at least until after the next halving.

[Abiky]

As long as the US Dollar remains as the reserve and trade currency of the world, it will be having an unfair advantage over the other currencies. They are able to sell their debt at extremely low interest rates of 1% to 1.5% per year. China and Japan currently have trillions of USD worth of US treasury bonds in their reserves. On the other hand, if a country such as India need to borrow money, then they need to offer a much higher interest rate. The BRICS nations have now proposed to come up with a different system for international trade. Let's see how it goes.

The USD may still be the world's reserve currency but that may not last for long. Everything will depend on how the FED will act against ever-increasing inflation rates. If inflation gets out of control, then USD will lose traction at a very fast pace. That will devastate the global economy to a point of no recovery. Some countries are quickly getting out of the USD system before that happens. But others haven't expressed their intentions to get out of the dollar anytime soon. Bitcoin's price is determined in Fiat, so it's likely the fall of the USD will cause BTC to go down the drain within a short period of time. After that, the EUR or another currency will take over the global economy. No one knows what will happen in the future so we can only hope for the best. Just my thoughts