The digital asset class remains free of the impact of economic and political uncertainties that affect traditional currencies. Moreover, BTC is finite in supply, with only 21 million coins in existence. This makes it a deflationary asset, which can be used as a hedge against inflationary pressures. For instance, the COVID-19 pandemic has led to many Central Banks, like the US Federal Reserve, resorting to massive fiscal stimulus packages and lower interest rates. This can cause devaluation of currencies like the US Dollar (USD) and Euro (EUR), while bitcoin is only impacted by market supply and demand factors.
In short, Bitcoin can be considered as a “safe haven” asset, a way to protect wealth in the event of the collapse of the fiat currency system.
Due to these reasons, cryptocurrencies like Bitcoin have added a fascinating dimension to the forex trading industry. Bitcoin’s low correlation with other currencies, like the USD and EUR, boosts its appeal as a tradable asset, making the trading of BTC to USD popular.