The Dollar Milkshake Theory and How It Can Affect Your Crypto Profits
The Dollar Milkshake is a theory focused on USD and its global influence, and as such, it touches upon cryptocurrencies such as bitcoin (BTC) as well. There are arguments, however, that should the US central bank pivot, crypto may go up – and there are arguments that BTC may not benefit from the rise of USD.
According to a Tokenhell report, investors and analysts found that the price movement of bitcoin and other cryptocurrencies has been moving in inverse proportion to the rise of USD. The report notes that “the main reason behind this is […] Dollar Milkshake because people have [begun] pulling out their investments from Bitcoins and put them into USD accumulation.”
However, every time there is a speech by Jerome Powell, the Chair of the country’s central bank, the Federal Reserve (Fed), the crypto world and those beyond it are focused on the speech for signs about the next pivot.
The argument by many analysts here is that the pivot is indeed coming – and that this will boost crypto portfolios.
But there is more to this story.
The so-named ‘Dollar Milkshake Theory’ was created by Brent Johnson, the Chief Executive Officer and Portfolio Manager at Santiago Capital, an investment advisory firm he founded.
According to The Investor’s Podcast Network,
The theory “is a strong counterpoint to the narrative that the next currency crisis will result in a weaker dollar. Brent’s theory highlights that the opposite might be true.”
Per Real Vision, Johnson argues that, before 2018, global central banks injected liquidity into the “milkshake” of the global market. What is happening now is that the mix of higher relative interest rates, the deep capital markets, tax policy, regulatory policy, the USD payment system, and the US military has
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