On 25 of May, at the Token Summit, Coinbase chief executive officer, Brian Armstrong cited the possibility of cryptocurrencies like Bitcoin replacing reserve currencies including the United States dollar. During the last 12 months, Bitcoin has shown a meteoric growth in value. Bitcoin has already recorded a 375% growth in price, surging from the $900 to $2400. Analysts have attributed this latest surge within the price of Bitcoin to the developing international attention in the direction of Bitcoin as a safe haven asset and virtual gold.
Each informal and institutional traders consider Bitcoin as a safe haven asset because of its decentralized nature and unbiased network. Within the peer-to-peer Bitcoin network, customers can transfer and obtain transactions without the existence of intermediaries and third party provider. Due to this economic independence, which Bitcoin represents, analysts and traders have identified Bitcoin as the opportunity to current banking and monetary systems.
Moreover, the majority have suggested the opportunity of Bitcoin changing reserve currencies in the future by offering an independent, transparent, decentralized and secure monetary network for customers. The national information service in Australia produced by the Australian Broadcasting Corporation, in which analysts mentioned the capability of Bitcoin replacing the United States dollar within the long-run, Brian Armstrong mentioned that Bitcoin and different cryptocurrencies will probably end up as the global reserve currency.
Brian Armstrong stated:
“I do suppose some cryptocurrency will end up being the reserve currency of the world. I see a path wherein that’s going to occur.”
Fred Wilson, the billionaire founder of early-nation funding company Union square Ventures, also noted that the huge adoption of cryptocurrencies and Blockchain is imminent. Wilson additionally expressed his optimism towards Bitcoin, the global biggest cryptocurrency by many measures, which he has supported since 2013, and a doubtlessly larger marketplace Bitcoin could target with the resolution of scaling problems.
Fred Wilson stated:
“By the end of this decade, we should begin to see Blockchain programs receiving massive adoption.”
However, Bitcoin would need to mature as a technology and resolve a number of the existing technical problems including scaling and the implementation of two-layer solutions. In order for Bitcoin to become a currency and a digital money system, its costs would need to decrease drastically and offer quicker confirmation speeds. Overall, if Bitcoin keeps increasing its marketplace capitalization, Bitcoin will potentially became a reserve currency in the nearest future.