Whispers are heard in the market that in recent times the loss of confidence upon the US dollar is prompting investors to line up for to gold, silver and digital currency. The US dollar index that measures the value of a dollar bill against its peers has seen a 10% drop i.e. from 103 in March to 93 in August 2020.
Amid the current bull market ( A bull market is a market that is on the rise and where the economy is sound as opposed to bear market where economy is receding and most stocks are declining in value), a major Bitcoin advocate has delivered another promising price prediction for the largest cryptocurrency.
Anthony Pompliano, co-founder of Morgan Creek Digital, believes that Bitcoin will grow continously in the long-term to break the $400,000 onset. Hence addressing the probability of Bitcoin becoming the Next Global Reserve Currency.
What is a Bitcoin?
Bitcoin is habitually labelled as cryptocurrency, virtual currency, digital currency. It is a type of money that is completely cybernetic- unseen and untouched.
It is an online form of money. One can use it to purchase products and avail services but then again not many sellers and service providers agree to take Bitcoins yet and some countries have forbidden its use overall.
The corporeal Bitcoins (physical metal coins) you see in pictures are a novelty. They would be of no value without the private codes printed inside them, used for representation purpose only.
How does Bitcoin work?
Bitcoins are in actual fact just computer files that are stored in the ‘digital wallet’ app on a smartphone or personal computer or any other similar electronic device that supports it.
People can send Bitcoin(s) to digital wallets of others and you can receive Bitcoins from these people in return.
Every single Bitcoin business deal is logged in a public domain called the Blockchain. It is a dispersed database/file. Bitcoins are powered by these Blockchain technologies.
When Bitcoin lets you enjoy anonymity, Blockchain ensures transparency. This makes it possible to trace the history of Bitcoins used and prevent people from spending coins not owned by them, creating duplicates or reversing transactions.
This Blockchain technology has its use beyond bitcoin. It could one day become nothing less than the operating system of an entirely new economy in the future. Saying that this technology is merely money is like calling the entire internet just an e-mail service.
Why is Bitcoin such a big News?
For the first time since digital currency came into life we now have a substitute to the existing system. Bitcoin is a form of money that no Government or Banks can control. Think about the time before the internet. How centralised the flow of information was. Basically if you wanted information you could get from a few major players like the newspapers. Today thanks to the internet information is decentralised and you can comminute and consume knowledge from around the world with the click of a button.
Bitcoin is the Internet of Money and is offering a decentralised solution to Money. Bitcoin has several advantages over the current system. Firstly, it gives you complete control over your money. With Bitcoin you and you alone can access your funds. No Government or Bank can decide to freeze your account or confiscate your holding. Bitcoin also cuts a lot of the middlemen from the process of transferring money. This means that in many cases bitcoin can be cheaper to use compared to traditional wire transfers or money orders.
Also, unlike fiat currencies Bitcoins was designed to be digital by nature. This means you can add additional layers of programming on top of it and turn it into “smart money”
Finally, Bitcoin opens up digital commerce to 2.5 Billion people around the world who don’t have access to the current banking system. These people are unbaked or underbanked because of where they live and the reality that they have been born into. However today with a mobile phone and clickable button, they can start trading using bitcoin, no permission needed.
Crypto will replace US Dollar as the World’s Reserve Currency?
The price of 1 bitcoin is currently trading just above $11,500, the highest level in about a year. Bitcoin has surged more than 60% in 2020 and is up more than 180% from its mid-March lows of about $4,000.
What’s driving the bitcoin spike? Experts say most of it is due to the weakness in the US currency- dollar. The dollar has fallen down in recent months on anticipation that the Central Reserve will keep interest rates close to 0% for coming years as a result of the financial disruption caused by the Covid-19 pandemic.
Just like how the prices of Gold and Silver flared up due to Investors investing in it because they are a good hedge against the falling dollar. Virtual currency is like a modern day safety investment.
But this virtual currency remains exceptionally unpredictable. Bitcoin’s extreme value swings in the market could scare away some investors.
Inflation in currencies value is also seen as one of the reason that drives people towards bitcoins and other digital currencies. Hyperinflation is inevitable with the trillions & trillions of dollars the FED is printing. Covid-19 Pandemic has really put things into perspective. The dollar has lost over 96% (approx.) of its value, that means today’s dollar would be worth less than 4 cents back in 1913. With the government scams, corruption and bank frauds on the rise, Cryptocurrency will more than likely become the solution and what the masses adapt to.
The dollar still rules over as exchange reserves and trading tool, but its influence is fading. In World trade, the U.S. dollar falls behind Europe’s euro and China’s yuan in complete dimensions of international transfer (imports and exports), IMF (International Monetary Fund) data show. So it seems like almost the perfect time to re-evaluate the prime substitutes to the dollar, even if none seems to be standing by to blow it off its branches just yet.
Digital Gold for Modern Day Investors- Will Bitcoin Capture More Market Than the Precious Yellow Metal?
Gold’s appeal as an international reserve currency is that it can’t be transcribed into actuality. That eliminates the threat that the Government reels its printing presses to supply outgoings, a malpractice that’s brought on hyperinflation and wrecked currency bills during the course of history. Gold can only be mined from the reserves and the talk is that this resource could also be depleting soon due to over mining and human greed.
Most of the Governments of various nations have abolished currency systems that use gold to transact instead of coins and notes. This was done to attain elasticity in management of economic complications.
“In the modern world, where money moves at the speed of light, sending shipments of gold to settle sovereign debt has become impractical”, says Eddie van der Walt, the Bloomberg News analyst.
The upward gush in bitcoin investment reflects similarity to the growth of gold, which is recently breaking its own high-roofed records.
An interesting fact to be noted that, while Gold was the seen as the last resort after Dollar, Bitcoin on the other hand is being seen as a dollar’s replacement first handed.
Many older investors are sticking with gold to hedge against the dollar’s weakness, although some under 40 members are tilting more towards bitcoin in comparison.
Do you think that Bitcoin is going to be the equivalent of the gold market? I think It could be better. It’s going to capture more market with its easy to access technology and environment friendly virtual mining as compared to physical mining of gold and other precious metals.
What could be the Bigger Picture in this Uncertain Scenario?
Created by-COINTELEGRAPH
The latest dollar competitors are a mystifying display of decentralised digital symbols, which includes Bitcoin, Ripple, Litecoin, Monero, Libra, Tether, Ethereum and many more. Extremely unstable and liable to mismanagement, they are notorious for their utility in unlawful transactions.
But the technology behind them- Blockchain and its prospective capability to rearrange universal economics, has gained powerful supporters like former Bank of England Governor Mark Carney and Facebook’s CEO Mark Zuckerberg. Bitcoin also has some cryptic users- SpaceX CEO Elon Musk and Microsoft’s Bill Gates- who say they are neither for or against it but applaud the technology (blockchain) behind it.
Digital monies have caught the eyes of Government authorities and policymakers in every part of the world for the reason that it proposes a threat to governments’ control over currency. Controllers fuss about it and say it could move an enormous band of fiscal activity out of their sight. Certain governments which earlier banned or were about to ban cryptocurrency are now planning for an official digital version of indigenous digital currency. 
What do you think? Will Bitcoin a threat to the mighty Dollar? Could Bitcoin become the Next Global Reserve Currency in the future?