Credit Suisse analyst predicts new monetary order that could benefit Bitcoin

The chief analyst of the bank Credit Suisse, which manages about $ 1.5 trillion, described the current geopolitical situation in his letter. He stressed the inevitability of a new money order and the possibility of Bitcoin gaining certain “if it still exists” privileges.

Third Bretton Woods system

It is with the installation of the new Bretton Woods system that Credit Suisse analyst Zoltan Pozsar explains the consequences of this economic situation. According to him, this period of world history will lead to a commodity crisis, which in turn will affect the establishment of a new monetary order in the monetary system for a long time. The comparison with the Bretton Woods system is based on the fact that this economic situation will significantly weaken the US dollar, on which much of the financial system is based. According to Pozsar: “This crisis is unprecedented since President Nixon separated the US dollar from gold in 1971.”

Another reason for the establishment of a new monetary order is the seizure of Russia’s foreign exchange reserves by the G7 countries after the Russian invasion of Ukraine. This case is unprecedented because it means the mass confiscation of such reserves. According to Pozsar, the weakening of the dollar may significantly increase the position of the yuan: “When this crisis (and war) is over, the US dollar should be much weaker, and on the other side, the yuan should be much stronger, backed by a basket of goods.”

The analyst also emphasized the ambiguity of the sanctions imposed on Russia. In his opinion, Western countries will not be able to impose the necessary restrictions on the aggressor’s country without affecting their own economy: “If you think the West can establish sanctions that maximize the effects on Russia while minimizing the risks to financial stability and prices, you might as well believe in unicorns.”

Benefits for Bitcoin

Despite the significant weakening of the US dollar and changes in the monetary system, Zoltan Pozsar said that this is a good opportunity to promote cryptocurrencies. In particular, the analyst believes that this economic crisis could have a positive impact on Bitcoin: “After this war, ‘money’ will never be the same… And Bitcoin (if it still exists by then) will probably benefit from all of this.” In particular, there is a considerable trend towards the use of cryptocurrencies. This can be explained by their advantages over fiat money during the economic crisis, despite the high volatility of some cryptocurrencies, including Bitcoin. Although this perspective is quite ambiguous, it can be noted that digital assets are already being used for donations in support of Ukraine. Currently, the amount of donations to the accounts of Ukrainian organizations is about $ 60 million in cryptocurrencies.

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Marta Krysan, Team bit4you.