Macroeconomic drivers, including the decline of the US dollar (USD), will dampen the effects of the Bitcoin (BTC) halving cycle, which is the source of the market booms and busts that have been a feature of BTC since 2009, according to investor and founding partner of venture capital (VC) firm Draper Associates, Tim Draper.
“Between 10-20 years from now, the dollar will be extinct,” Draper told Cointelegraph in an interview. “The world is changing, and we are watching it happen. We are right in the center of an anthropological leap forward,” he added.
Draper said investors increasingly view Bitcoin as an “escape valve” against poor governance, distrust of banking institutions, fiat currency inflation, and geopolitical tensions, which are all driving global adoption of the supply-capped digital currency. The VC added:
“The halvings may have less of an effect if Bitcoin runs against the dollar the way it has, because it will probably go for a prolonged period. It will still be affected in some way by that four-year cycle, but I think the effect will dampen.
I think there will be a macro driver that pushes Bitcoin along, and I think the macro driver will be a bigger deal than the halvings,” the VC continued.
The potential disruption of the four-year market cycle continues to be debated, with some, like the CEO of Xapo Bank, Seamus Rocca, arguing that the four-year cycle isn’t dead yet, and others saying that BTC has matured into a macroeconomic asset that has shed its traditional market dynamics.
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Bitcoin and hard money alternatives are positioned to benefit from USD decline
In February, Bitwise analyst Jeff Park predicted that Bitcoin would appreciate in value and gain widespread global adoption due to growing geopolitical tensions, currency inflation, the decline of the US dollar, and the resurgence of protectionist trade policies.
The Trump administration has repeatedly said that dollar-denominated stablecoins are central to maintaining the dollar’s global reserve status. By placing the dollar on blockchain rails, it allows anyone with a cellphone and a crypto wallet to add demand for US dollars.
However, Bitcoin maximalist Max Keiser argues that US dollar stablecoins are a temporary solution to the declining dollar and will be outcompeted by gold-backed tokens and BTC.
Magazine: Bitcoin vs stablecoins showdown looms as GENIUS Act nears