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HomeCryptocurrencyBitcoinHow BTC Profits From US-Saudi Petrodollar Deal End

How BTC Profits From US-Saudi Petrodollar Deal End

Coingape Staff

Bitcoin (BTC) stands to benefit from the end of the US-Saudi petrodollar deal. Moreover, the financial world is poised for a seismic shift following Saudi Arabia‘s decision not to renew its longstanding security agreement with the United States, which expired on June 9, 2024.

This pivotal move allows Saudi Arabia to sell oil and other goods in various currencies. These include the Chinese RMB, Euros, Yen, and Yuan, rather than exclusively in US dollars. In addition, the use of digital currencies like Bitcoin could also be explored.

US-Saudi Petrodollar Deal Ends

The latest development marks a significant departure from the petrodollar system established in 1972 when the US decoupled its currency from gold. In addition, the decision is expected to accelerate the global trend of moving away from the US dollar, with Bitcoin standing to gain significantly from this change.

Saudi Arabia has announced its participation in the China-dominated central bank digital currency (CBDC) cross-border trial, Project mBridge. The move underscores its commitment to diversifying its economic dependencies. The Bank for International Settlements (BIS) announced Saudi Arabia’s full participation in Project mBridge.

The project includes central banks from China, Hong Kong, Thailand, and the UAE. According to Reuters, Josh Lipsky from the Atlantic Council noted, “The most advanced cross-border CBDC project just added a major G20 economy and the largest oil exporter in the world.”

The mBridge platform, now at its “minimum viable product” stage, aims to facilitate cross-border transactions using CBDCs. Moreover, the platform boasts compatibility with the Ethereum Virtual Machine, the backbone of the Ether cryptocurrency network. This opens new avenues for digital currency transactions.

Also Read: Bitcoin Price: Hedge Funds Heavily Shorting BTC, Will It Outshine GameStop Saga?

How Will Bitcoin Benefit From This Development?

In a post on X, Doctor Profit, a well-known crypto analyst, wrote, “The US-Saudi petrodollar agreement ends and won’t be extended. This will force the US to print tons of new USD!” The anticipated increase in USD printing is expected to lead to rising inflation.

As inflation climbs, the value of fiat currencies like the US dollar tends to erode. Moreover, it would prompt investors to seek refuge in alternative assets. Bitcoin, with its fixed supply and decentralized nature, is positioned as a prime beneficiary of this shift.

Additionally, the analyst predicts a bullish trend for Bitcoin. He stated, “From this day, dollar will come under heavy pressure, USD will be printed, inflation will start rising. Bullish for Gold, Bitcoin, Stocks and real estate.” The short-term economic turmoil expected from this transition may be daunting, but the long-term prospects for Bitcoin are promising.

A concerned user pointed out that average people won’t invest in Bitcoin, gold or other assets when inflation rises. Doctor Profit responded, “Do you think the market needs average people to move? It’s more a long term rise. Affects from this change will be seen in 8-12 months from today.”

Bitcoin’s role as a hedge against inflation becomes more pronounced as traditional financial systems face instability. Furthermore, the decentralized and deflationary attributes of Bitcoin make it an attractive store of value. Bitcoin also offers a hedge against the devaluation of fiat currencies.

Doctor Profit further remarked, “Soon the US will realize it can’t defeat inflation. They will manipulate the masses as they did when manipulated the inflation basket recently. They will make it look like inflation is defeated, to justify new money printing. Their goal is crystal clear: TURN ON THE PRINTERS!!”

Also Read: Bitcoin Price Analysis: Renewed Whale Interest Hints BTC to New High Next Week

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CoinGape comprises an experienced team of native content writers and editors working round the clock to cover news globally and present news as a fact rather than an opinion. CoinGape writers and reporters contributed to this article.

The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.

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