Distrust in fiat currencies could be beneficial for Bitcoin, says bank strategist
More than ever, digital assets are posing a significant threat to major currencies, particularly, the United States dollar. According to Ruchir Sharma, chief global strategist at Morgan Stanley Investment Management, rising global distrust in traditional currencies, could fuel the growth of digital assets. Sharma believes that the dollar’s reign as the world’s reserve currency is likely to end soon, and Bitcoin may capitalize on the rising lack of confidence.
In an article published in The Financial Times, Sharma expounded his theory, stating that the dollar’s supremacy run had lasted for 100 years. Other major fiat currencies like the Euro and Chinese Yuan have been unable to unseat the dollar for the same lack of world-trust. However, the new rally and rise in popularity of digital assets could become a worthy competitor, threatening the dollar’s supremacy.
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.
2020 has been favorable to digital assets. Bitcoin, in particular, is undoubtedly one of the hottest investments of 2020 and has quadrupled in price since March despite the global pandemic. Furthermore, the adoption of Bitcoin is steadily growing. An interesting example is PayPal’s entry into the space and its accumulation of Bitcoin with an eye of accepting it as a payment option.