There have been many predictions about bitcoin eventually becoming an official payment method and possibly replacing world currencies like the dollar or euro. But is it actually possible in the foreseeable future?
Glowing prospects
One prediction about bitcoin becoming a reserve currency and replacing the US dollar belongs to CEO of Coinbase Brian Armstrong. He estimated that about 200 million people in the world already use cryptocurrencies. Certainly, this is not commensurate with the number of people who perform transactions in dollars. However, he claimed that any fiat currency has a lifespan while bitcoin compares well in this respect.
Experts from Bloomberg agree with him, believing that bitcoin will stop being a purely speculative asset and will gradually become a digital equivalent of gold, which was confirmed by the lower volatility of the cryptocurrency exchange rate and growing trade.
Representatives of the Kraken crypto exchange expect that bitcoin will gain wider circulation in the world thanks to millennials, and can potentially compete with fiat currencies.
Real prospects
Since bitcoin has seriously lost in value this year, optimistic forecasts about its future have slightly calmed down. However, right now, when the value of the biggest cryptocurrency is once again close to $60,000, speculations are heating up.
It is still too early to say whether bitcoin can actually replace the dollar in relatively near future. Unlike the dollar, backed up by the strong US economy, bitcoin is not as secure. Due to its high volatility, investors are wary about transactions involving digital currency and prefer to store their money in more reliable dollar assets.
Another serious problem is the lack of agreement between the states regarding cryptocurrency payment regulation. In particular, the U.S. Securities and Exchange Commission is extremely cautious about digital assets and considers many of them non-listed securities.
It is most likely that within the next few years, bitcoin will not be able to substitute the US dollar although cryptocurrencies will certainly enjoy high interest from investors.
By Dmitry Noskov, expert at StormGain, a cryptocurrency trading and saving platform