Bitcoin (BTC) Price Rockets Higher This Year, While Ethereum (ETH), XRP and Other Major Coins Brace for a Wall Street Bombshell

The bitcoin price has just had a $4 trillion "watershed moment," while ethereum, XRP and other major coins are braced for a Wall Street bombshell.

The bitcoin price is poised for a "watershed moment" as the U.S. dollar role in allocated foreign reserves of central banks and governments has declined "strikingly" over the last two decades, according to the International Monetary Fund (IMF).

While the U.S. dollar has enjoyed a strength in recent times, it has not been matched by increases in the shares of the other ‘big four’ currencies—the euro, yen, and pound, IMF economists Serkan Arslanalp, Barry Eichengreen and Chima Simpson-Bell wrote in a report.

"Rather, it has been accompanied by a rise in the share of what we have called nontraditional reserve currencies, including the Australian dollar, Canadian dollar, Chinese renminbi, South Korean won, Singaporean dollar, and the Nordic currencies," they wrote.

"This shift in the currency composition of reserves away from the traditional G4 currencies has been driven by several factors, including the changing global trade and financial landscape, the rise of new economic powers, and the development of new digital financial technologies such as automatic market-making and automated liquidity management systems," the economists added.

"It is also striking that private investors have moved into dollar-denominated assets, while the U.S. dollar has experienced a strength, as highlighted by the strong performance of U.S. stocks and bonds in recent years and the weakness of the dollar against other major currencies in H2 2022," they wrote.

"This suggests that the narrative of dollar weakness, while true in relative terms, may have been overstated in absolute terms, at least until recently."

However, the New Federal Reserve Bank of New York wrote a report earlier this month outlining the narratives around "declining dollar shares in official reserves, and increasing roles for gold holdings by central banks," that it says has been "inappropriately" generalized.

"While the dollar's decline has attracted attention, the shares of the other G4 currencies have remained broadly stable and the dollar's role still dwarfs that of any other currency," the New York Fed wrote.

"Moreover, the increase in gold holdings is concentrated in a small group of countries, and the overall level of official gold holdings remains modest relative to total reserves."

However, some commentators disagreed with the New York Fed's appraisal of the situation.

"The Fed now admits some countries are moving to gold," tech investor and former Coinbase chief technology officer Balaji Srinivasan posted to X, pointing to what the Fed says is a "small group" that "represents 3 billion people. So 37.5% of the world is moving away from dollars towards gold."

Former billionaire and All In podcast "bestie" Chamath Palihapitiya predicted bitcoin could "completely replace gold" as countries adopt it—potentially pushing it's market capitalization toward gold's $15.7 trillion.

"Bitcoin is the only investable asset that can completely replace gold, and it's only a $400 billion market cap," Palihapitiya said on the podcast.

"If countries were to adopt bitcoin, even slowly, and it were to take bitcoin's market cap to that of gold, which is about $15.7 trillion, you're talking about a 40X from here."

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News source：https://www.kdj.com/cryptocurrencies-news/articles/bitcoin-btc-price-rockets-ethereum-eth-xrp-major-coins-brace-wall-street-bombshell.html

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