Search the Community

The global strategist of the American financial conglomerate Ruchir Sharma warned that the American currency is losing its reserve status, and told why BTC could claim its place The dollar is losing its position as the world’s reserve currency, and bitcoin has already begun to gradually replace it as a payment and savings instrument, Ruchir Sharma, global strategist at the American financial conglomerate Morgan Stanley, said in a column for Finance Times. In his opinion, this process will accelerate in the future, and there are several reasons for this. First, the dollar has held the status of a reserve currency for 100 years. In the past, only five countries had this status: Portugal, Spain, the Netherlands, France and the United Kingdom. The currency of each of these states retained its dominant position for an average of 94 years. This raises questions about how long the dollar will hold out and what will be its successor, Sharma said. From his point of view, the cryptocurrency can claim to be a reserve currency. The demand for bitcoin grew during the crisis due to the decline in public confidence in national currencies. They are depreciated due to the policies of states to print money. Sharma called this the reason why investors during the pandemic began to “wholesale” bitcoins. As a result, BTC has risen in price by 400% since March and has become one of the best investments of the year. The strategist added that even after the end of the pandemic, countries are unlikely to stop conducting additional currency issues. Secondly, small companies began to use bitcoin in the framework of international trade, Sharma continued. This mainly applies to countries such as Nigeria, where there are difficulties with the circulation of dollars, and like Argentina, where the exchange rate of the national currency is extremely unstable. An additional driver for the distribution of cryptocurrency in this vein was the participation of PayPal. In November, the payment system added support for BTC and three more coins for US users and announced that in 2021, customers in other parts of the world will have access to similar features. Sharma called the third factor a gradual decrease in skepticism in relation to cryptocurrency. Bitcoin and other coins are mostly negatively viewed by those who grew up in the non-digital era, that is, the older generation. Young people, on the other hand, are more supportive of digital assets. According to statistics, 27% of millennials own them, and this share is growing, the strategist noted. He suggested that demand for cryptocurrencies will continue to increase as well from tech-savvy people, a trend that will intensify as governments introduce digital asset regulation. Bitcoin’s skyrocketing price could still be a bubble, Sharma warned. But even if it bursts, the rise in the price of cryptocurrencies should be perceived by countries that print the currency as a signal. National currencies, especially the dollar, will not always be the only reliable means of exchange or payment, Sharma concluded. More Here: https://startcryptotrading.com/