The U.S. dollar has long been a dominant form of finance, but according to some analysts, the dollar’s strength and place in the monetary space is beginning to fade.
How the U.S. Dollar Is Losing Its Grip
To be fair, the U.S. dollar still holds plenty of precedence. The currency is utilized to pay for goods and services in both the U.S. and several allied nations. In addition, the U.S. dollar is what is giving many people their stimulus funds to help them survive the present coronavirus crisis, but analysts say that its stamina is disappearing given how much overprinting has occurred in the past few months alone.
One such person to say so is Dick Bove, a senior research analyst at Odeon Capital Group LLC in New York City. In a recent statement, Bove said that the dollar is experiencing a lot of challenges to its present reign as a high-ranking form of fiat. Among those challenges are the coronavirus, harsh economic conditions in both the U.S. and abroad, and… you guessed it… cryptocurrency.
As we have seen over the past few months alone, the popularity and price of bitcoin have exploded to new heights. Many people now see bitcoin and its altcoin cousins as potential “safe havens” or tools designed to hedge one’s wealth against inflation and other harsh economic problems. Bitcoin can potentially protect one’s wealth and keep one financially sturdy.
It appears there’s plenty of doubt regarding the dollar’s ability to stay strong, while confidence is increasing in bitcoin. Bove wrote that a monetary system governed and ruled by the almighty U.S. dollar could be on the verge of ending permanently, which means digital currencies could eventually take over from here.
In his research note, Bove writes:
The new currencies might be paper, metal or digital impulses. The possibility of this happening can only be described as frightening, yet the probability is quite high.
Much of the doubt surrounding the U.S. dollar comes from the excessive printing of additional money and the stimulus packages that have gone towards keeping Americans stable during this time of crisis. Back in April and May, many Americans that made less than $75K earned an additional $1,200 that they could put towards monthly expenses such as rent, food and utilities.
Some Are Against More Stimulus Funds
Now, there are plans for a second stimulus package, but many people feel that the idea of stimulus money has worn out its welcome. The first stimulus attempts garnered “finger wagging” from the likes of Tesla and SpaceX CEO Elon Musk, who claimed that money could not simply be printed out of thin air and that issuing further stimulus funds would potentially bring inflation to the mix.
An agenda regarding the second stimulus checks has not been solidified yet and talks have continued to stall in Congress.