Warren Davidson is one of the most crypto-friendly members of Congress. In a recent interview, the lawmaker took a shot at the dollar. Davidson, a Republican Congressman from the 8th district of Ohio, took to Twitter to share his cynicism about the U.S. dollar.
Little Hope for the Greenback
Davidson had replied to a tweet from Forbes Crypto, asking readers to sum up their views on the crypto industry’s performance in 2020. Simply, Davidson said, “Short the dollar.” Shorting is stock lingo for predicting that an asset’s value will drop soon.
Short the dollar #SoundMoney
— Warren Davidson (@WarrenDavidson) December 8, 2020
Obviously, Davidson wasn’t succinct in his outlook for the greenback.
Davidson appeared to have been echoing concerns from financial experts about the dollar’s position all year long. The coronavirus pandemic has forced downward pressure on stocks and the market in general, and the Federal Reserve has had to print more currencies to support stimulus plans and other relief efforts.
Recently, CityAM reported that the Federal Reserve printed 18 percent of the total supply of dollars in 2020 alone. The news report added that this means almost one in five dollars was created this year.
The problem could get much worse going into 202.
President-elect Joe Biden has claimed to issue a $7 trillion recovery package to soften the coronavirus’s impacts on the working class and small businesses. Such a move will add a new chunk of debt to the already gargantuan levels that the country has accumulated this year.
Against the backdrop of the weak dollar, the country could also face several dangerous economic factors that will affect wealth for many. Speaking to at an investment conference last week, Jim Rogers, the co-founder of George Soros’ Quantum Fund, criticized incoming Secretary of the Treasury Janet Yellen.
“We had a horrible time in 2008 because of too much debt, and since 2008, the debt everywhere has skyrocketed. We can’t even count how much the debt is up… If Janet Yellen is the next Secretary of the Treasury, she loves to print and spend money,” Rogers explained, per a Reuters report.
Bitcoin on the Brink
Weakness in the dollar usually translates to gains in alternative assets like Bitcoin and gold. So, it is easy to see why Davidson will counsel shorting the greenback.
In the meantime, Bitcoin remains strong, even though it has lost some significant ground this week. Enthusiasts have been waiting for it to cross the all-time high and establish a comfort point above $20,000, but it has so far been unable to. Going into this week, Bitcoin dropped below $18,000 for a few minutes. For now, it is holding steady above $18,000 but has been unable to break the $18,500 mark.
It is expected that it will cross the all-time high mark sometime in the next few weeks. With institutional interest still strong and more players expected to enter the market, hope is still high for a sustained rally.