Analyst Explains Declining Japanese Yen Could Be Bullish for Bitcoin, Here’s How

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As a seasoned crypto investor with a keen eye on global economic trends, I find the recent analysis by Swan Bitcoin executive Dante Cook particularly intriguing. The potential correlation between the declining Japanese Yen and Bitcoin’s future performance is an interesting perspective that warrants closer attention.

The broader cryptocurrency market has been affected by global economic trends, causing widespread anxiety and heightened price fluctuations. Intriguingly, an executive from Swan Bitcoin posits that a weakening Japanese Yen could potentially benefit Bitcoin, even if it proves detrimental to US Treasury bonds.

Over the past month, I’ve observed a notable decrease in the value of the Japanese Yen against the US Dollar. Specifically, there has been a 2.9% decline, with each Japanese Yen currently being equivalent to only 0.0064 US Dollars. In a recent episode of Bitcoin Daily on May 8, Swan Bitcoin’s head of business, Dante Cook, elaborated on this trend.

Japan and the United States could face significant consequences, given that Japan holds the largest quantity of U.S. Treasuries, and just 4% of its foreign exchange reserves consist of gold, with the remainder primarily invested in U.S. Treasuries.

As a crypto investor, I’d interpret Cook’s statement this way: I understand that Japan is facing a dilemma where it might have to sell its US Treasury bonds to strengthen its currency unless the US government provides some form of covert liquidity or enters into a swap agreement with the Bank of Japan for exchanging currencies.

The sell-off may cause doubt in conventional securities markets, possibly leading to a large increase in available funds. This influx could make Bitcoin an attractive option for investors seeking safer alternatives to store their value.

Institutional investors have significantly increased their investment in Bitcoin since the SEC approved the listing of 11 spot Bitcoin ETFs in the United States, leading to a substantial increase in liquidity for the cryptocurrency.

Based on Farside’s figures, Bitcoin ETFs focusing on the 11th spot have collectively drawn in approximately $11.78 billion since their launch. Currently, Bitcoin is priced at around $61,680, representing a weekly gain of roughly 7.45%.

Investing in Bitcoin and Altcoins

As a researcher studying the finance industry, I’ve noticed that the instability in conventional financial markets may be driving an increasing number of individuals towards using Bitcoin and investing in other volatile crypto assets. In essence, due to the fragility of traditional monetary systems, some people are starting to view these digital currencies as a form of financial gambling.

Cook also pointed out VanEck, a provider of Bitcoin spot ETFs, mentioning its underperformance in the ETF race yet its new addition – the MarketVector MEMECOIN index.

He commented with a touch of surprise, “It’s quite unexpected, yet not completely unheard of, for an establishment to offer such services to retail consumers.” Emphasizing the persistent volatility in conventional financial markets.

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2024-05-09 10:42