‘Dollar Milkshake Theory’ Is Still In Play And Could Benefit Bitcoin, Says Santiago Capital CEO
By Benzinga
Brent Johnson, CEO of Santiago Capital, offered a provocative perspective on the future of the global financial system, with implications for both traditional and crypto markets.
What Happened: In a recent interview, Johnson reiterated his “Dollar Milkshake Theory,” which puts forth that the U.S. dollar will strengthen significantly against other currencies, potentially causing global economic turmoil.
He argues that despite widespread predictions of the dollar’s demise, it remains the linchpin of the global financial system. “The dollar falling is the Fed staying in control,” he states. “The Fed losing control is the dollar going to 125 or 135 or God forbid 170 because that’s when things start to break,” said Johnson, referring to the DXY Index.
This outlook has significant implications for crypto investors. While many in the crypto space anticipate a weakening dollar driving Bitcoin (CRYPTO: BTC) adoption, Johnson’s theory suggests a different scenario. A strengthening dollar could potentially trigger a global liquidity crisis, affecting all asset classes, including cryptocurrencies.
Also Read: Bitcoin’s Line In The Sand Is $60K, But Careful With Ethereum And Solana, Says Top Technical Analyst
Why It Matters: Johnson doesn’t dismiss crypto’s potential and views it as part of a broader strategy to hedge against market volatility. “Understanding what the dollar will do dramatically helps you understand what’s going on in the world,” he notes, suggesting that this knowledge can inform both traditional and crypto investment strategies.
Johnson also touches on the concept of asymmetric bets, a strategy familiar to many crypto investors. He suggests allocating a small portion of a portfolio to high-risk, high-reward positions that could pay off enormously if certain unlikely events occur.
While Johnson’s views are certainly not mainstream, they offer a unique perspective on potential macro scenarios that could significantly impact both traditional and crypto markets.
What’s Next: The influence of Bitcoin as an institutional asset class is expected to be thoroughly explored at Benzinga’s upcoming Future of Digital Assets event on Nov. 19.
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This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Image: Shutterstock
