The Impact of the US Dollar on the Cryptocurrency Market

Now the US dollar index is struggling, and the dollar is depreciating against other currencies. It should be said that with the US interest rate at 4%, money from all over the world should be drawn to the US like a magnet. But who is foolish enough to just deposit money in the US for a bit of interest?

The US has a debt of 36 trillion dollars, and Trump’s 'Make America Great Again' plan has increased the national debt by another 5 trillion. Under these circumstances, the dollar is getting weaker, and people’s trust in the dollar is being challenged. Normally, people should consider investing their money in other countries to buy some assets. However, those in the US surely want to keep their money in their own dollar system. So you see, the US stock market keeps rising; this is not due to the Federal Reserve lowering interest rates or expanding its balance sheet, but rather Wall Street financial giants using leverage to push stock prices up. For instance, Morgan Stanley used 9 times leverage, while Goldman Sachs went even further, using 13 times leverage. Why do they dare to do this? They want to make it less likely for people to sell their stocks, as everyone is afraid that selling will mean missing out on further gains.

So what does this have to do with our cryptocurrency market? The cryptocurrency market has almost become a 'piggy bank' for US funds. Coupled with the issuance of stablecoins, it’s important to know that stablecoins are linked to US debt; if you hold stablecoins, it’s like you are helping to 'absorb' US debt. A portion of stablecoins will definitely be used in the cryptocurrency market; you can’t deny that. When stablecoins enter the crypto space, the first to benefit is Bitcoin, followed by DeFi, and then RWA.

Looking back at the US stock market, stock prices are already very high, and if they want to continue rising, it will require greater effort and higher costs. Now looking at the cryptocurrency market, it can also be considered part of the dollar system. Can it help alleviate the US debt problem? And is the cryptocurrency market controlled by Wall Street? Does allowing the cryptocurrency market to rise also give Trump a boost? The moving averages of the cryptocurrency market have changed after six months of adjustment, and they are different from before. With all this in mind, shouldn’t you also consider making moves in the cryptocurrency space?$BTC