As an experienced financial analyst, I believe that the end of the US-Saudi petrodollar deal will significantly impact Bitcoin and the global financial landscape. The decision by Saudi Arabia to sell oil in various currencies, including digital currencies like Bitcoin, is a game-changer.
Bitcoin (BTC) could experience gains due to the termination of the US-Saudi petrodollar deal. Furthermore, global finance may undergo significant changes following Saudi Arabia’s decision not to renew their historic security pact with the US, which ends on June 9, 2024.
As a crypto investor, I can tell you that this significant shift enables Saudi Arabia to trade oil and other commodities in multiple currencies beyond just US dollars. The list includes the Chinese RMB, Euros, Yen, and Yuan. Moreover, delving into digital currencies such as Bitcoin is an intriguing possibility worth considering for even more diverse transactions.
US-Saudi Petrodollar Deal Ends
As an analyst, I would interpret the recent advancement as a substantial shift from the petrodollar system set up in 1972 when the US dissociated its currency from gold. This move is projected to intensify the ongoing global transition towards reducing reliance on the US dollar. From my perspective, Bitcoin could potentially benefit greatly from this evolution.
Saudi Arabia has officially joined China’s central bank digital currency (CBDC) experiment, Project mBridge, as reported by the Bank for International Settlements (BIS). This decision signifies Saudi Arabia’s determination to broaden its economic alliances.
Involved in the initiative are the central banks of China, Hong Kong, Thailand, and the UAE. As reported by Reuters, Josh Lipsky from the Atlantic Council pointed out, “This groundbreaking cross-border central bank digital currency (CBDC) project has now incorporated a significant member of the G20 and the world’s largest oil producer.”
The mBridge platform has reached its minimum viable product phase and is designed to simplify cross-border transactions using central bank digital currencies (CBDCs). Furthermore, this platform supports the Ethereum Virtual Machine, which powers the Ether cryptocurrency network. As a result, it provides novel opportunities for digital currency transactions.
How Will Bitcoin Benefit From This Development?
In a recent post on X, renowned cryptocurrency analyst Doctor Profit stated, “The US-Saudi petrodollar agreement is set to expire and won’t be renewed. Consequently, the US may be compelled to print large amounts of new US dollars.” This anticipated surge in USD printing could potentially result in heightened inflation.
With rising inflation, the purchasing power of paper currencies such as the US dollar decreases. Consequently, many investors look towards non-traditional assets for protection. Among these alternatives, Bitcoin stands out due to its limited supply and decentralized structure, making it a potentially profitable investment during times of currency deprevalation.
As an analyst, I anticipate a bullish outlook for Bitcoin. I explained, “Starting today, the dollar is predicted to face significant pressure, with increased printing leading to rising inflation. Gold, Bitcoin, stocks, and real estate are expected to perform well under these circumstances. The short-term economic instability arising from this transition might be unsettling, but the long-term potential for Bitcoin looks encouraging.”
A user with worries expressed that common individuals tend to avoid investing in assets like Bitcoin, gold during inflation surges. In response, Doctor Profit explained, “Is it your belief that the market relies on the participation of average people? It’s primarily a long-term trend. The effects of this shift may not be noticeable until 8 to 12 months from now.”
The significance of Bitcoin as a shield against inflation grows stronger as conventional financial systems experience turbulence. Additionally, its decentralized and deflationary properties make it an alluring form of value storage. Bitcoin functions as a safeguard against the erosion of fiat currency values.
“Soon, the US will come to terms with the fact that they cannot win against inflation. To deceive the public, they may employ similar tactics used in manipulating the inflation basket not too long ago. The outcome will appear as if inflation has been defeated, allowing them to validate more money printing.”
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2024-06-10 10:21