Goldman’s Dollar Forecast Could Spell Bad News for Bitcoin

As the U.S. dollar index has increased, cryptocurrency prices have fallen.

Goldman’s Dollar Forecast Could Spell Bad News for Bitcoin

Goldman Sachs strategist Kamakshya Trivedi wrote in a note to bank’s client that a peak in the U.S. dollar remains several quarters away.

"We do not expect the Fed to embark on easing until 2024, and a trough in growth also seems months away," he wrote.

According to Trivedi, the dollar did not weaken until economic activity declined and the Federal Reserve began to loosen its monetary policies during the 1970s, a period of high inflation as well.

Bitcoin (BTC) may be adversely affected by this development. There are numerous reasons for the crypto market's bear market of the past year, but the strong dollar is at the top of the list. Having bottomed just under 90 in mid-2021, the U.S. dollar index has surged to its current level of 113.69, which is the highest reading since early 2002.

The economist Trivedi offered some hope to dollar bears (and bitcoin bulls), suggesting that the European economy could strengthen, new leadership at the Bank of Japan may become more hawkish, and China may back off on its zero-tolerance policy for COVID-19. All of these factors might affect the U.S. dollar, although he noted, "We are not there yet."

There was a sharp increase in the dollar on Friday morning, and bitcoin fell below $19,000 to $18,750.

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