Will Bitcoin end the dollar’s supremacy one day?
Bitcoin (BTC) poses a significant threat to the world’s reserve currency, the United States dollar, according to a strategist at major American investment bank Morgan Stanley.
Ruchir Sharma, chief global strategist at Morgan Stanley Investment Management, believes that the dollar’s reign is likely to end due to global distrust in traditional finance, while Bitcoin is likely to capitalize on that lack of confidence.
In a Dec. 9 article in The Financial Times, Sharma provided a brief outline on the history of the world’s reserve currencies, noting that the dollar’s run had lasted 100 years at the start of 2020. According to the strategist, other major global fiat currencies like the euro or China’s yuan have failed to gain the world’s trust, underlining the lack of a successor for the dollar.
Sharma said that a new class of decentralized contenders — cryptocurrencies like Bitcoin — are likely to threaten the dollar’s supremacy. Bitcoin has already established itself as one of the hottest investments of 2020 by quadrupling in price since March amid the pandemic and the U.S. Federal Reserve’s continued money printing, he noted:
“The dollar’s reign is likely to end when the rest of the world starts losing confidence that the US can keep paying its bills. […] Money printing is likely to continue, even when the pandemic passes. Trusted or not, Bitcoin will gain from widening distrust in the traditional alternatives.”
Sharma also pointed out that Bitcoin is beginning to make “progress on its ambition to replace the dollar as a medium of exchange.” The strategist said that Bitcoin’s adoption is steadily growing from investment to international trade and other use cases. “In recent weeks PayPal and its Venmo subsidiary have started storing Bitcoin with an eye towards accepting it as payment next year,” he added.
The strategist warned central banks to pay more attention to their monetary policies if they want to maintain their position of power:
“Bitcoin’s surge may still prove to be a bubble, but even if it pops, this year’s rush to cryptocurrencies should serve as a warning to government money printers everywhere, particularly in the U.S. Do not assume that your traditional currencies are the only stores of value, or mediums of exchange, that people will ever trust.”
Source: , CoinTelegraph
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