According to Odaily, Grayscale Research recently stated that a weakening dollar and continued low interest rates could benefit Bitcoin. Similar to physical gold, Bitcoin serves as an alternative currency system competing with the dollar in the international market. The research team also noted that the primary downside risk for cryptocurrency valuations is a further rise in unemployment and a potential recession. Therefore, investors should closely monitor upcoming labor market data, including the next monthly employment report scheduled for release on September 6.
Despite the recession risks, Grayscale Research believes that there is little tolerance for a significant economic downturn. Policymakers are likely to intervene at the first signs of trouble by injecting liquidity and promoting consumption. The lack of discipline in monetary and fiscal policies is one reason some investors choose to invest in Bitcoin. Consequently, periods of economic weakness may further highlight Bitcoin's long-term investment value.
