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One of the reasons why many investors prefer bitcoin is that it protects their assets from dollar price inflation. Bitcoin has already become a part of several investors’ portfolios. Bitcoin, on the other hand, is not immune to a collapse of the US currency. Any decline in the value of the US dollar will be reflected in the price of bitcoin. But the bigger question is what will happen to bitcoin’s value if the US currency crashes?

There’s been a lot of discussion about the economic consequences of a depreciating dollar, and the news isn’t good. However, this does not imply that Bitcoin will follow suit. For starters, bitcoins have a limited amount of 21 million tokens. That’s all there is to it once all 21 million have been released into the economy. There will be no more made. In other words, don’t anticipate Bitcoin to experience the same level of hyperinflation as Venezuela or Zimbabwe. However, if there was a catastrophic economic collapse, you would expect to see that degree of inflation with the dollar.

If the US dollar falls in value, There is a high probability that the value of Bitcoin will skyrocket. Bitcoin is currently used as a substitute for fiat currencies. To put it another way, it’s a hedge against the dollar’s depreciation. Bitcoin will become increasingly valuable when the value of the US dollar declines. If the dollar crashes, Bitcoin will emerge as the world’s new reserve currency.

However, there are two scenarios that could occur if the dollar crash

Bitcoin loses a significant number of American investors who panic sell and cash out in a hard currency such as the pound, euro, or yen.

Until the dollar begins to rebound, more Americans are investing in Bitcoin.

Both situations are very likely to occur. Because of its volatility, Bitcoin has a low level of trust among casual fans and the broader public. And the second possibility is unlikely unless the dollar crashes completely, like it did in Weimar Germany when buying a loaf of bread with a wheel barrel full of cash.

Albert Einstein said “Compound interest is the eighth wonder of the world. He who understands it, earns it … he who doesn’t … pays it.” Einstein isn’t the only smart person that understands the power of compound interest.

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