Commentators say financial institutions are rapidly waking up to “down-market trading” that could benefit assets such as gold and Bitcoin.
Entrepreneur Anthony Pompliano said on Thursday’s podcast that financial institutions have a new concept to hang on to, called a “downgrade transaction,” that will protect them.
This is the same thing that goldbugs and bitcoiners have been talking about for years, he added, and now financial institutions have finally realized that “nobody can stop printing money.”
“I feel like this is no longer up for debate. Bitcoin and gold are definitely benefiting because people recognize that the dollar and bonds are going to have a lot of trouble going forward.”
Decrease trading is an investment strategy based on the expectation that fiat currencies will lose purchasing power over time due to currency inflation caused by central bank money printing.
Investors are placing positions in assets they think will maintain or rise in value while traditional currencies, such as gold and Bitcoin (BTC), which have risen 50% so far this year, have fallen in value.
“We were hoping that private wealth managers and financial advisors would adopt Bitcoin as part of their (portfolio) allocation,” Jeff Park, chief investment officer at ProCapBTC, told Pompliano.
Downgrading transactions are a “dark problem in finance”
Matt Hogan, Bitwise’s chief investment officer, shared his thoughts on the downside trade on Thursday, calling it “something of a dark financial problem.” “You can’t touch it at all, but it affects everything,” he said.
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“The recognition of ‘degraded trading’ is accelerating for a simple reason: deficits are rising, debt is piling up, and accommodative policies are suppressing real yields,” said Brian Kubelis, chief strategy officer at OnRamp Bitcoin.
“Investors anticipating continued dilution are looking for a standard that remains constant for them, and that search is manifesting itself in both gold and Bitcoin.”
Not just digital gold
Blink Wallet Chief Financial Officer Enrique Ho told X that Bitcoin is more than just digital gold.
“This is anti-value destruction with the intention of fixed supply, transparent issuance, and unreliable verification,” he said, adding, “It is the purest expression of capital preservation in a world where money itself is being repriced.”
“This is a cheap deal and will define the next decade.”
US dollar continues to decline
The decline in the US dollar is evident in the US dollar index (DXY), which measures the value of the dollar against a basket of currencies.
It fell about 12% this year, from a high of 110 in January to a three-year low of 96.3 in mid-September, according to TradingView, but recovered slightly in October.
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