Dogecoin, Government and Inflation: Everything You Need to Know . - The Comprehensive Minds

Dogecoin, Government and Inflation: Everything You Need to Know .

Dogecoin latest updates

Some pretty bad news came from the U.S government today, which will be really bullish for dogecoin in the near future. So, let’s talk about it. The bad news is that the U.S. Consumer Price Index has risen 5.3% year-over-year in August. But some analysts believe that it’ll persist for a long period of time. And this is good for cryptos like dogecoin because people will turn to them as a good hedge against inflation. 

Now, let’s try to understand it. 5.3% is well above 2%, a figure that the U.S. Federal Reserve sees as “economically healthy.” The Federal Reserve now sees inflation at 5.2% in one year, 4% in three years, and "largely expected price rises" in food, rent, and medical costs. 

But According to a Bank of America strategist, this 4% inflation could persist longer than the Fed reported. David Roche, president of the investment firm Independent Strategy, holds a similar view. He said inflation could hit 3 to 4% in mid-2022. This could cause a crisis in the financial market and the U.S. economy at large. Also, the inflation experienced by consumers is understated. Once the consumers start feeling the effects, they are likely to push for higher wages, which will start a vicious cycle. 

Also, the inflation in the U.S. will not spare other countries. High inflation will make the U.S. dollar more attractive against other countries. And these countries will likely experience a capital outflow as investors seek high returns.


Also Read: Will Dogecoin Ever Reach $1?

The result will be market volatility, slow economic growth, and a high-interest rate. This will mean that countries with dollar-denominated loans will have it rough paying back their debts. In the worst-case scenario, some countries could experience a recession. Needless to say, the whole world is watching, and they want to see how far this goes. This must be taken as a buying signal for cryptos like dogecoin. 

As I said, They are always argued as a great hedge against inflation for the returns they’ve provided this year. In a nutshell, the central bank money printing will lead to higher inflation, or the decrease in the value of money, over time. bitcoin, by contrast, has a fixed limit of 21 million coins that can ever be created. This limited supply allows bitcoin to resist inflation. 

We’re talking about bitcoin because dogecoin’s price is clearly following its trajectory right now, with a correlation of more than 0.8 at the moment. Coming back to it, TD Securities analysts think that the Federal Reserve might delay the planned tapering of its 120 billion dollar monthly asset purchase policy. 

The Fed officials agree that they would start unwinding their loose monetary policies by the end of this year. But the nonfarm payroll report earlier this month showed that the U.S. labor market had not recovered fully. That would prompt the Fed to hold its tapering plans, and any further delay could entail both crypto strength and dollar-weakness. This is a bullish cue for dogecoin as well. 

Also, the decentralized nature of doge makes it a perfect store of value. A good hedge against inflation is an asset that increases its value over time. And dogecoin has done just that. Since January, it has risen by around 5000%. And if we talk about bitcoin, It was trading at around 5000 dollars when the Coronavirus was recognized as a global pandemic. 

And since then, bitcoin has increased by a whopping 235%. many analysts also believe that bitcoin will reach 100k by the end of this year, which is obviously great for doge too. Talking about a hedge against inflation, another option is gold. But it looks like crypto is finally taking over it in terms of popularity. 

Data compiled by Finbold reveals that the average online monthly search for the keyword ‘Buy Bitcoin’ worldwide has reached 241k, which is three times more than ‘Buy Gold’. The findings also revealed that Americans search for “Buy Bitcoin” 116k times per month, which is 48% of the global volume searches, and nearly three times as often as they search for the term “Buy Gold”. 

Buy Bitcoin

On the long-term outlook, Gold is bearish. it reached a high of 1830 dollars on 3r September. A bearish candle pattern called an evening star, formed at the same level, and The market obeyed the command of the bearish pattern formed. More bearish candles were produced and the price declined to 1790 dollars, where it consolidated for a few days and On September 16, the sellers acquired more pressure and the price dropped to the support level at 1750 dollars. 

And another interesting thing was that In 1921, Henry Ford proposed the creation of an “energy currency” that could form the basis of a new monetary system. His article posed striking similarities to the peer-to-peer electronic cash system outlined in Satoshi Nakamoto’s 2008 Bitcoin whitepaper. So, it looks like one of the smartest industrialists in the history of mankind might be right about it. 

Now, let’s talk about another bullish thing that happened recently. In a single day, 2 billion dollars in ethereum was removed from exchanges. This was the highest daily outflow for ethereum that we've ever seen. And This is a very bullish sign for crypto, but when we see coins like bitcoin, ethereum, and others being taken off exchanges, we know people are very bullish on crypto and that the optimism and sentiment are very high. 

This is because if you take it off exchanges, you're putting it into cold storage. That means you won't be able to sell it easily. You intend to keep it for a long time.

Senator Margaret Hassan

Now, let’s look at another news from the U.S. government. Senator Margaret Hassan came out and said in a letter that she asks for more targeted measures to prevent and prosecute the use of crypto for criminal purposes. 

She said that the government should crack down on this. now, some may see this as a negative thing, but I see it as a positive one. This demonstrates that the U.S. government is attempting to integrate crypto in order to protect citizens. they are not advocating the outright banning of crypto. 

They're saying, "Look, we need to protect ourselves from ransomware attacks by hackers. We need to make sure it's not being used for illegal purposes. but other than that, they say it's fine, and we're fine with using it. We just have to make sure that everyone is acting legally, that no one is hurt, and that no one is hacked, that Nobody is going to lose a lot of money. 

So, I think while people don't like regulators stepping in, it's ultimately a good thing that's going to protect people and allow big institutions to really get involved. 

Coming back to dogecoin, some great news was that Voyager, which is a fast-growing crypto platform, is using an NFL star to promote crypto. And it looks like he enjoys dogecoin as well. 

NFL star

Now, I'm not familiar with this NFL player. Many of you may be familiar with him, but what's interesting is that in this commercial that they're filming for the cryptomarket, the NFL player has a dog on his lap and they’re obviously referring to dogecoin here. So I'm just very happy to see that even to promote crypto, the face will be dogecoin. 

Now, let’s talk about ethereum for a minute. According to bitinfocharts, the correlation between doge and ethereum in the last 90 days has been higher than between doge and bitcoin. so, eth is another crypto we have to keep an eye on. 

JPMorgan’s crypto expert, Nikolaos said that “We look at the hash rate and the number of unique addresses to try to understand the value for Ethereum. We’re struggling to go above 1,500 dollars.” Personally, I think I'd rather listen to cathie wood, who’s proven herself as one of the smartest investors in the world. 

In a recent interview, she said that ethereum is clearly satisfying some huge unmet needs. one of those needs is yield. She then highlighted the “ridiculous rallies” in junk bond yield markets that have evidenced the demand for high-yielding financial instruments. so, things are looking for eth, which is good for doge too.


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