Is it Inevitable That Bitcoin Will Reign Supreme?
Last month alone, Bitcoin’s obituary was written half a dozen times. Respected sources, including the New York Times, The Institutional Risk Analyst, and others all were decreeing the pending death of the world’s best-known crypto. Doubters persist, suggesting Bitcoin is risky and has little chance of ever becoming an established form of currency.
However, those ready to write Bitcoin off are sadly mistaken. The success of Bitcoin is not speculative, but rather a certainty, or as certain as anything in the world of finance can ever be.
Bitcoin Has an Army of Supporters
Bitcoin supporters, and there is a virtual army of them, have confidence in the brilliance that is embedded at the technical level. Supporters believe in the fundamental value of crypto and what it holds for the financial sovereignty of the holder. Supporters also believe in the capacity of Bitcoin to move wealth through time. The most important may be the belief that Bitcoin is the best way to survive the myriad of economic upheavals the world is witnessing.
Bitcoin believers are certainly not alone. It is a fact that the crypto is being embraced by governments and institutions, as well as ordinary savers. Although there is a tendency for the daily press to focus on price, Bitcoin has passed and continues to pass, structural and cultural milestones with ease.
All the evidence that is needed to support Bitcoin’s status as a reserve currency is available.
The New Standard
More than half a century ago, fiat replaced the gold standard. When this happened, bankers worldwide discovered a myriad of ways to debase the currency. The world continues to witness it with President Biden’s multi-trillion dollar splurge the most recent example of the malleability of paper money.
People are rapidly becoming aware of the fact that Bitcoin is impervious to inflation. There is, and always will be, a cap of 21 million coins. There is no way to create more out of thin air as there is with the dollar.
There is another advantage to Bitcoin. Being digital, there is no need for any physical storage infrastructure. There are no vaults, no armored vehicles for transport, all it takes to transfer millions of dollars’ worth of the crypto is a couple of minutes on a computer and a click of the mouse. Couple these advantages with the fact that Bitcoin is not under the control of any centralized authority, rendering any attacks ineffective.
The Road to Bitcoin’s Rise to Becoming a Reserve Currency
The days of speculation are over. Bitcoin becoming a reserve currency is happening now.
Several large public corporations have started to convert their cash balances into Bitcoin, and why not? As opined by the CEO of Microstrategy, Michael Saylor, holding on to cash is akin to sitting on a melting iceberg. Businesses such as Tesla, JPMorgan, Goldman Sachs, and more are buying large tranches of Bitcoin and opening their trading operations. As the value of fiat currency continues to erode, Bitcoin is well along with its reserve currency status.
When the Federal Reserve admits that fiat is a mistake, there will not be a big “Aha” moment. When corporate treasuries as well as ordinary citizens begin to adopt Bitcoin as a savings asset, everything begins to snowball.
Managing the Transition
This is not meant to mean that Bitcoin will follow a straight path to supremacy. Even within the community of Bitcoin aficionados, there is disagreement on how the network will develop. Although some are of the opinion that it is fine the way it is, others believe there is further to go yet on infrastructure and blockchain-based services.
The same holds with regulation, some believe it should not be controlled while others disagree.
Whatever the future holds for Bitcoin, one thing is for sure. Any attempt to destroy it will not succeed. India and Pakistan have both attempted to ban transactions made with Bitcoin. These attempts have been shot down in court and the impossible task of ending peer-to-peer transactions.
It is the view of many that regulation will eventually have to come. These individuals believe the better option is to set sights on a sensible, but industry-led, framework. Some fully understand the technological and financial characterizes of Bitcoin. It is hoped by many that governments will engage in constructive dialogue, as setting side what is seen as an inevitability will not do any good for anyone involved.