- The traditional financial system is at the brink of extinction as more billionaires around the world add Bitcoin to their portfolios.
- The cryptocurrency market continues booming as trust erodes for the world's reserve currency.
The growing level of interest in Bitcoin from high net worth individuals have become too significant to neglect. Although the pioneer cryptocurrency is at nascent stages, more investors are buying into the store of value narrative.
US dollar's woes are only beginning
The question about the need for the US dollar as a reserve currency has been on the minds of many thought leaders in the traditional financial space. The CEO of BlackRock, Larry Fink, believes that a decentralized digital currency poses a threat to the global financial system.
While Bitcoin continues to rise in value, some of the most prominent sovereign currencies are losing their purchasing power. For instance, goods or services that were priced at $1 in 1700 would go for about $53 today.
The purchasing power of the US Dollar
Fink's endorsement adds to the expanding list of billionaires like Stanley Druckenmiller and Paul Tudor Jones, who have made bets on Bitcoin's success as they see it as a hedge against inflation.
Bitcoin thrives during times of uncertainty
The current economic structure as it is known might be on the brink of extinction. The growing interest in the blockchain industry is making banks as well as paper notes obsolete. There is no longer a need for a global reserve currency as digital assets, such as Bitcoin, enter the monetary system.
Governments have begun to discuss ways to digitize fiat currencies in a desperate effort to retain their relevance in the financial markets.
Speaking at the council of foreign relations, the former governor at the Bank of England, Mark Carney, acknowledged the shortfall of fiat compared to digital currencies.
"One of the accelerants of Covid and the experience of a big shift towards has been to reinforce the importance of the innovations that have happened and further innovations in the payment side. At the heart of that will be a move towards central bank digital currencies," said Carney.
Monetary sanctions like the ones imposed on the Chief Executive of Hong Kong, Carrie Lam, make a case for the need for a decentralized digital currency. Lam affirmed that the US had cut her off from the global banking system, forcing her to keep "piles of cash."
In the meantime, Bitcoin has not only gained a substantial amount of value against the US dollar, but it has also outperformed every other asset in the traditional financial markets, including gold. If this trend continues, some of the industry's most famous technical analysts maintain that BTC could go as high as $300,000 in the coming years.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
Bitcoin: Retraces to around $75,000 after hitting new all-time high
Bitcoin (BTC) edges slightly down on Thursday and trades at around $74,900 after hitting a new all-time high (ATH) of $76,400 on Wednesday, buoyed by the victory of the crypto-friendly candidate Donald Trump in the US presidential election.
Ethereum price jump spurs most significant ETF inflows in six weeks
After a positive momentum in crypto markets following the outcome of the US presidential election, spot Ether exchange-traded funds (ETFs) in the United States saw their highest inflows in six weeks.
Top trending meme coins PEPE, BONK, and FLOKI achieve double-digit gains following Trump’s victory
The prices of top trending meme coins Pepe (PEPE), Bonk (BONK) and FLOKI (FLOKI) experienced double-digit gains following Trump’s victory on Wednesday. The technical outlook suggests that the three meme coins hover around key levels, and the breakout could push these coins higher.
SUI hits new all-time high fueled by Trump election win
Sui (SUI) edges down on Thursday and trades at around $2.24 after hitting a new all-time high (ATH) of $2.38 earlier in the day, buoyed by the victory of a crypto-friendly candidate, Donald Trump, in the US presidential election.
Bitcoin: New all-time high at $78,900 looks feasible
Bitcoin price declines over 2% this week, but the bounce from a key technical level on the weekly chart signals chances of hitting a new all-time high in the short term. US spot Bitcoin ETFs posted $596 million in inflows until Thursday despite the increased profit-taking activity.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.