Bitcoin Targeting Bullish Breakout as Morgan Stanley Predicts Dollar Crash

The U.S. dollar is going to crash and Bitcoin is going to skyrocket as a result. That’s the statement being made by crypto purists, financial pundits and financial bloggers all around the world right now. It’s one thing for those groups of people to be saying it. It’s another thing when a major investment bank like Morgan Stanley is saying it.

The value of the U.S. dollar is sinking as we speak. Just this week, the U.S. Dollar Index, a measure of how well the American dollar is doing against other currencies and assets, settled in at 90.22. That’s the lowest level it has reached since April 2018. That’s why Morgan Stanley is downgrading the dollar.

How Far Will the Dollar Fall before Bitcoin Skyrockets?

Mark Wilson is a Chief Investment Strategist at Morgan Stanley. He sees the American dollar crashing by 10% or more within the next 12 months, which is a huge number. He notes that it’s actually good for the long run of the global economy, saying that the United States government is being really aggressive with structural deficits and the coronavirus pandemic.

Wilson’s ideas bring to light something that most retail investors struggle with, which is trying to understand the global economy on a deeper level. On the one hand, most people agree that a weakening American dollar is probably a bad thing for the short term, which is why we see the price of Bitcoin rising. Yet here we have Wilson saying that it might actually be a good thing for the U. S. Dollar to go down in value a little bit.

It’s this kind of contradictory talk from different experts across traditional finance that’s probably leading to choose the high-risk/high reward uncertainty of cryptocurrencies over the uncertainty of the traditional market. It’s happening in a big way too.

The Institutional Investing Onslaught Continues

Grayscale Investments now controls over $12.6 billion in Bitcoin. The firm by far owns more bitcoin than any other institutional investor in the world. What’s more important though is that in the last 24 hours, the firm purchased $137 million USD more of Bitcoin.

It’s an indication that we’re seeing a new trend happening. Early institutional investors are now focused on doubling up their holdings. This means the new supply of Bitcoin being produced is about to get dramatically smaller over the next few years.

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