Is Bitcoin The New Global Currency?
Is Bitcoin The New Global Currency? Since the outbreak of the pandemic, almost everything including the economy has weakened except Bitcoin which has enjoyed a dramatic proclamation. The digital asset accomplished to reach new record highs, earlier this month. And with remarkable flows and gains, the old debate, about the possibility of bitcoin becoming a global currency and putting an end to the dollar’s reign, seems to have glowed again.
Nevertheless, the US dollar is as vast as ever. Despite the talk of wavering American sovereignty, the dollar has successfully ruled as the average of international trade, continuing to be the anchor against which other nations rate their currencies.
The Truth most be told
It is unlikely that Bitcoin will replace the dollar as the world’s leading currency or at least not anytime soon. Bitcoin does have many money-like makings as well; payments can be made with it, to buy day to day items. All you need is a seller that is ready to accept payment in bitcoin. And due to all the thrills surrounding bitcoins, many sellers are eager to do that.
Bitcoin does, however, have something that other supplies do not, something that is vaguely sinister, which may in fact have been a driving force behind its increasing popularity; Bitcoin allows its holders to complete transactions secretly.
On the other hand, one reason why bitcoin taking over the dollar seems like rumor at best is that the maximum number of bitcoins that can exist is fixed, crowned at 21 Million. But it is a well-known fact that the supply of money needs to enlarge in order to meet the needs of a growing economy. Since there can only be 21 Million bitcoins, it makes its chances as the bigger currency very low.
Another vital reason, behind bitcoin not being a viable substitute to fiat money, is its highly unbalance and unstable nature. Granted, the value of the dollar varies as well. Its worth in terms of foreign currencies changes frequently on currency exchanges, and inflation has worn its value significantly in terms of really goods and services.
However, drawing matches with Bitcoin, the dollar is a model of constancy. Inflation, on average, runs around 2% yearly and the changes against other currencies attract consideration only if they amount to more than 5%. An investor holding assets in dollars will have a appealing good idea about the future value of holdings in a year or more. Simply put, the dollar remains a stable and superior store of value.
Shifting attention towards Bitcoin, in 2017 it surged recording a growth of about 350% in terms of dollars. Unfortunately, it gave back all these gains in just a matter of months. Considering just the month of January in this year so far, Bitcoin was able to register a record trading price of $40,000. But only half an hour later, it dropped to $36,000.
Such wild swipes go to show that Bitcoin is certainly not a stable store of value. However, these price turnings are also what makes Bitcoin so incredibly attractive to investors. Especially with the increasing availability of trading agendas that allow users to take advantage of these crypto booms. Therefore, if you invest with Bitcoin Champion, one such trading program, you don’t even need to be an active trader to take advantage of price flows resulting from the unstable nature of the market.
Many traders and investors may be able to make a great many dollars by capitalizing in bitcoin. But the price swings, at least for ordinary people, don’t do much for normal people.
It gives people no way to plan their future as an satisfactory currency must due to the excessive amount of doubt involved. Equally, if the dollar is less stable in terms of real goods and services or doesn’t have a value as high, it still has a better track record and eventually is a better store of value than Bitcoin, giving it an upper hand as a currency.
There can be little disbelief that many Bitcoin fanatics will point out, saying that the massive variations in the dollar price of Bitcoin speak of the dollar’s uncertainty rather than Bitcoin’s. And that may have even been a compelling argument if Bitcoin and the dollar were the only two measures on earth. But, by contrasting their movements against, say, per capita income, it is equally apparent that the movements in Bitcoin’s worth fluctuate far more.
Perhaps someday, Bitcoin will be fruitful in becoming widely accepted and be able to obtain a stable value in real terms. Maybe then it might be strong enough to test the dollar and get recognized as an independent international standard. But for now, bitcoin remains a unstable commodity, and its replacement as a global currency seems to be a reserved dream.