Amid BRICS’ opposition to the dollar, asset manager BlackRock has said crypto can protect against a potential US economic crisis. Indeed, the firm noted that its client base has started to embrace Bitcoin for its potential as a hedge against potential trouble for the greenback if some kind of hard landing was to meet the economy.
Throughout the last two years, BRICS have firmly embraced de-dollarization. Moreover, that has incited a global shift away from the asset. Now, as local currencies are surging in use within the alliance, the dollar has faced decreased usage. That and macroeconomic factors that jeopardize the country’s outlook have many preparing for the worst.
Also Read: BRICS: 134 Countries Explore Digital Currencies, US Dollar in Jeopardy
BlackRock Says Bitcoin Can Defend Against US Economic Crisis, Dollar Struggles
The US Dollar has faced increased scrutiny this year. According to the Atlantic Council’s Dollar Dominance Meter, the greenback’s share of global reserves has dropped more than 14% since 2002. That year marked the birth of the BRICS bloc, being the first year for the five-nation alliance.
Since then, the alliance has not relinquished pressure on the US currency. It has sought to challenge Western dominance in the financial realm. Specifically, it has created its payment systems, championing its national currencies. In the meantime, digital assets have emerged as viable alternatives, with the bloc further embracing those.
Now, amid BRICS opposition, BlackRock has noted that crypto can protect from an impending US economic crisis. In a recent report, the $10 trillion asset manager noted the superior potential for the asset class, specifically Bitcoin, to protect investors.
Also Read: Pakistan Set to Join BRICS, Adopt New Currency in 2024?
“The growing concern in the US and abroad over the state of US federal deficits and debt has increased the appeal of potential alternative reserve assets as a potential hedge against possible future events affecting the US dollar,” the firm noted.
Subsequently, they noted that these circumstances “explain a substantial portion of the recent Brazilian institutional interest in Bitcoin.” Moreover, it shows the correlation between crypto rise and US dollar uncertainty.
The BRICS grouping has firmly embraced crypto in recent months. Russia has led the charge, softening its stance on the asset class. Moreover, the United States has been firmly against it. Various states have already banned a Central Bank Digital Currency (CBDC). However, 2024 presidential nominee Donald Trump has sought to focus on its development. Creating an interesting narrative to observe heading into November and beyond.
