Jefferies, a global investment bank, has recently predicted the probable collapse of the American dollar, which proves beneficial for Bitcoin owners. Jefferies happens to be a leading full-service capital markets and global investment banking firm headquartered in the United States.
The firm primarily operates across the United States, Asia Pacific, the Middle East, and Europe. In a statement to investors published on Wednesday, the Global Head of Equity Strategy of Jefferies, Chris Wood, called gold and Bitcoin ‘critical hedges’ against both currency debasement as well as decreasing returns from inflation.
Bitcoin Owners Might Just Benefit From The Collapse Of The U.S. Dollar:
Wood has obtained multiple recognitions, including the Best Strategist by Asiamoney at Asia in 2020. Wood also explained that apart from decreasing its balance sheet, the Federal Reserve has raised interest rates at a completely unprecedented speed in its basic efforts to actually tame the soaring inflation.
He believes that the Fed might be forced to adopt a dovish stance abruptly in the wake of the U.S. recession while the Central Bank is grappling with a 33 trillion dollar U.S. ‘debt death spiral.
The analyst from Jefferies warned, “G7 central banks, including most importantly the Federal Reserve, will not be able to exit from unconventional monetary policy in a benign manner and will ultimately remain committed to ongoing central bank balance-sheet expansion in one form or another.”
He further emphasized, “Such a failure to exit from unorthodox monetary policy in a benign manner is likely to culminate in the collapse of the U.S.-dollar paper standard to the benefit of both gold bullion owners and also owners of bitcoin.”
Wood basically advised investors to regard bitcoin and gold holdings as a kind of insurance rather than short-term trades. In addition, he also recommended that the long-term global and US dollar-based investors, including the more popular pension funds, allocate about 10% of their actual portfolios to BTC.
The analyst further added, “Bitcoin has now become investible for institutions, with custodian arrangements in place for digital assets, and represents an alternative store of value to gold.”