The chief executive of Bitcoin wallet and payments application Strike believes the federal government is about to make moves that will be beneficial for the price of BTC.
In a new Kitco News interview, Jack Mallers says the US cannot afford a strong dollar and it also cannot afford a weaker dollar following the stock and crypto wipeout earlier this month.
[adinserter block="1"]On August 5th, stocks and crypto crashed as the world witnessed the unwinding of the yen carry trade. In Japan, droves of investors borrowed cheap yen to purchase high-growth assets like stocks and crypto to generate profits.
But when the yen suddenly rallied, those investors had to sell the assets, buy yen and pay back what they borrowed to protect their profits.
According to Mallers, the US is now trapped and the only way out is to stealthily print more dollars.
“What I think we saw is the dollar weakened against the yen: trouble – unwinding of a carry trade.
If the dollar strengthens, it’s an unwinding of another carry trade. [When the] dollar strengthens, those that hold dollar debt all of a sudden have a tough time financing that. You sell what you can, not what you want. All these foreign entities own Treasuries. You sell the Treasuries: the yields go up. The yields go up, US solvency is now questioned, they print money anyway.
So they’re stuck.”
Mallers predicts that Bitcoin will rally and outperform other asset classes once it sniffs out that fresh dollars are being injected into the system.
“What you’ll see in assets more broadly but Bitcoin specifically is is there liquidity? Is there debasement coming to the currency? Are they injecting more dollars into the system?
So my expectation is they will, and I think Bitcoin will outperform, and Bitcoin will be a leader but of course, the S&P 500 will follow no doubt.”
At time of writing, Bitcoin is trading for $60,503, up 3.31% in the past day.
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