New York (CNN Business)The price of Bitcoin has soared this week while the US dollar -- the world's number one reserve currency -- tumbled. Could this be the beginning of the end of the greenback's reign?


Bitcoin (XBT) hit a high of more than $48,000 on Tuesday after Tesla (TSLA) reported a $1.5 billion investment in the cryptocurrency and said it could soon be used to buy its electric cars.
Bitcoin was up some 5% Tuesday afternoon, while the US dollar index was down 0.6%.


Tesla isn't the first company to dabble in bitcoin, but it's definitely the most prominent one: A vote of confidence from the richest man in the world, Telsa CEO Elon Musk, is quite the endorsement.


"As more and more companies start accepting bitcoin, this will only lead to further increases in demand in a market which is limited in supply," wrote Fawad Razaqzada, analyst at ThinkMarkets, in a note to clients.

ThinkMarkets的分析师Fawad Razaqzada在一份给客户的通知中提及:“当越来越多的公司开始接受比特币,这只会导致市场中的比特币因为需求增加但供应受限而进一步升值”。

And that makes it an attractive asset to add to a portfolio, Bechtel said.


That's pretty bullish for the long-term bitcoin outlook, even as some, notably Bank of America, have called the crypto rally "the mother of all bubbles."


But don't turn all your hard-earned dollars into bitcoin just yet.


Bitcoin has jumped more than 30% in February alone -- an impressive increase. But "that kind of price action is the exact opposite" of what reserve investors are looking for," Marc Chandler, chief market strategist at Bannockburn Global Forex, told CNN Business. "Rather than making it more attractive as a reserve asset it makes it less attractive, because volatility is risk."

单在2月,比特币就升值超过30%-一个令人印象深刻升幅。“但这类价格波动恰恰和储备投资者所追求的目标相反” Bannockburn Global Forex 的首席市场策略师Marc Chandler提到:“作为一个储备资产,少点引人关注比非常引人关注更好,因为波动也就是风险。”

Weaker dollar under Biden


The US dollar's reserve status might not be at risk just yet, but there's a strong chance the it will continue to weaken in the near term.


Interest rates now are ultra low and the Federal Reserve has signaled that they will stay there until the recovery is well under way. That makes America's currency less appealing for investors.


US Treasury yields, which follow interest rate expectations, have ticked up recently amid hopes for a faster economic recovery. But economists at Capital Economics don't think this trend will last given the Fed's stance on low rates.

美国国债收益率跟随利率的预期,在近期市场弥漫着经济快速复苏的氛围中上涨。但是鉴于美联储对低利率的立场,Capital Economics的经济学家们并不认为这个趋势将会持续下去。

The vaccine rollout paired with continued government support could lead to a mini economic boom in the summer, and lead more optimistic investors to take some risks. That would be bad for the super safe US dollar, as those investors could favor riskier currencies.