The year 2024 has emerged as a pivotal juncture marked by the convergence of strategic initiatives among BRICS nations, the enduring allure of gold, and the meteoric rise of Bitcoin. This strong trifecta is poised to change the dynamics of international currency dominance, threatening the US Dollar’s long-standing control.
Dollar heads for a catastrophic 2024
Economic difficulties have plagued the United States for the majority of the past year. Similar to the international community, the nation has endeavored to rein in inflation and strengthen its precarious financial situation.
Nonetheless, that may become even more difficult in the coming year, as BRICS, gold, and Bitcoin could all combine to devastate the US currency.
All three provide arguments for why they could significantly impede any potential development in the dollar in the coming year. Furthermore, they all serve as indicators that warrant the confirmation that the dollar may experience a significant downturn.
ING was among the experts who predicted a decline in the US currency in 2024. They specifically stated that the fall was to be expected throughout the year, “barring huge unexpected risk premia emerging in the currency space.” However, the BRICS economic alliance is responsible for a significant portion of that drop.
The BRICS bloc has not been hesitant about criticizing the US dollar. They have specifically asked for a significant reduction in global reliance on the US dollar. Furthermore, they have implemented strategies to reduce such reliance through multilateral trade operations.
These kinds of accomplished strategies will have repercussions that will be visible in the coming year, especially because a number of countries have already pledged to implement these de-dollarization plans by 2024. As a result, BRICS is a crucial component of the slide, but it is poised to collaborate with gold and Bitcoin to produce a leaky year for the US dollar.
Standard Chartered predicts that Bitcoin will hit $100,000 by the end of next year. Such an investment would represent a cosmic shift in the world’s financial reality. Furthermore, it ignores the rising international trend towards digital assets as a currency.
China’s digital yuan has been a huge success. Countries all around the world have followed their lead and attempted to create their own digital money. The more dominant these become, the more these countries attempt to distance themselves from the US dollar. There should be plenty of opportunities for this to happen in 2024.
Gold, Bitcoin, and Dollar individual performance
The crypto market is up – led by the Bitcoin bull run earlier today. Bitcoin (BTC) is currently trading at $41,857.07 per coin, with a 24-hour trading volume of $35,222,787,013.49. This is a 5.50% increase in the last 24 hours and a 12.89% increase in the last 7 days.
The global crypto market valuation is now $1.61 trillion, a 3.69% increase over the last 24 hours and a 79.51% increase over a year ago. Bitcoin has a market cap of $818 billion as of today, reflecting a 50.88% market dominance. Meanwhile, the market cap of stablecoins is $130 billion, accounting for 8.1% of the total crypto market size.
Gold reached new highs early Monday, breaking its previous high from August 2020. Despite the Federal Reserve’s cautious view, this spike was driven by rising market expectations of US rate reduction.
The rise in gold, which began in October, was encouraged further by Fed Chair Jerome Powell’s remarks on the restrictive position of monetary policy. These remarks caused the currency and Treasury yields to fall, benefitting gold. Despite market anticipation of a rate decrease by May, Powell advised against premature expectations of policy easing.
The promotion of the precious metal has several implications for the US dollar. For starters, it provides a critical investment opportunity for countries as the dollar continues to underperform.
Second, its popularity is strongly linked to investor expectations about the performance of the US economy. Indeed, the asset is commonly regarded as a hedge against inflation, and its rise could have an impact on the currency.
Many forecasts predicted that gold would surpass its all-time high of $2081 in 2024. The asset, however, is already well on its way to approaching that figure. As a result, its popularity appears to have surged, with bulls taking the upper hand at this point. If this trend continues, the US dollar may face yet another challenge throughout next year.