An analyst at Credit Suisse, the banking giant with $1.5 trillion under management, recently wrote about the current geopolitical situation. A new monetary order is inevitable, he said, and Bitcoin (BTC) could benefit from it, “if it still exists”.
A new Bretton Woods, says Credit Suisse analyst
The birth of Bretton Woods III. That’s how Credit Suisse analyst Zoltan Pozsar describes the consequences of the current economic and diplomatic situation. The former Federal Reserve and US Treasury official gave his analysis of the current crisis, and the long-term implications for the monetary system.
He believes that the period the world is experiencing will lead to a commodity crisis, which in turn will lead to a new monetary order. This will involve a weakening of the US dollar, on which a considerable part of the system is currently based. Hence this comparison with Bretton Woods, according to the analyst:
“This crisis is unprecedented since President Nixon separated the US dollar from gold in 1971. “
For Pozsar, this paradigm shift was also marked by the seizure of Russian foreign currency reserves by the G7 countries, following the invasion of Ukraine. This creates a previously unseen risk of confiscation of such reserves, as the manoeuvre is unprecedented. Furthermore, he believes that a big winner in the deal could be the yuan:
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“When this crisis (and war) is over, the US dollar should be much weaker, and on the other side, the yuan should be much stronger, backed by a basket of goods. “
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Credit Suisse sees advantage for Bitcoin
The conclusion of the analysis has caught the attention of cryptocurrency enthusiasts. Zoltan Pozsar believes that this economic crisis could benefit Bitcoin (BTC):
“After this war, ‘money’ will never be the same… And Bitcoin (if it still exists by then) will probably benefit from all of this. “
The analyst indeed believes that Western countries will not be able to both economically sanction Russia, and mitigate the fallout for their economies:
“If you think the West can establish sanctions that maximise the effects on Russia, while minimising the risks to financial stability and prices, you might as well believe in unicorns. “
The effects so far are measured
Bitcoin and crypto-currencies in general are in any case being particularly observed at the moment. Their existence outside the traditional monetary systems gives them a great advantage in times of crisis. For the time being, however, the price of BTC tends to play ping-pong in a range between $35,000 and $45,000:
BTC price since the beginning of the Russian invasion of Ukraine
Will the current crisis help cryptocurrencies to take off? Already, they have taken their place in the conflict, with Ukraine appealing for donations. As of yesterday, more than $60 million in crypto assets were counted as having been sent to support the country. And the funds are still pouring in to government addresses.
