A Bloomberg article Expectations that the Americans forego the security of the dollar for more speculative assets like stocks, gold and bitcoin (BTC).
High savings rates, low returns
Due to the blocking of COVID-19, the savings rate in the USA is at an all-time high. However, the yield offered by financial institutions on savings accounts is close to zero. At the same time, assets like Bitcoin, stocks and gold have seen double-digit gains since March. This makes them an attractive option for investors.
The article mentions a 28-year-old Californian who told the reporter that he would convert his $ 15,000 savings held in a high-yield savings account with Ally Bank into Bitcoin. He says he does this because he expects long-term economic stagnation.
July was the worst month in ten years
The reality is worse than the Bloomberg article. It's no secret that the dollar is rapidly depreciating against other leading fiat currencies. According to the Financial Times, July is the dollar worst month in a decade.
Bitcoin and U.S. Dollar Index (DXY) July 2020. Source: Trade economy.
With another round of stimulus checks around the corner and most of the nation still affected by COVID-19 restrictions, it is possible that this problem will only get worse. The Americans may have more depreciating fiat in their hands in the short term, and could try to turn their holdings into higher-yielding assets. However, there is no free lunch. In the investment world, high returns are associated with high risks.