Bitcoin poses a threat to the US dollar as trust erodes in the global financial system

  • 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.

Purchasing power of the US Dollar

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.

Cryptos feed

Latest Crypto News

Latest Crypto News & Analysis

Editors’ Picks

Ethereum Classic Price Forecast: ETC correction presents new opportunity to profit

Ethereum Classic price resolves pennant continuation pattern to the downside on relatively light volume following three consecutive inside days on the bar chart. Residual selling pressure may dampen rebound attempts, but if a new low is printed, it should be marginal. 

More Ethereum News

EOS price marches to $23 after announced new crypto exchange

EOS price is not overbought, despite three of the last seven days registering gains of at least 30%. The technical backdrop should not inhibit EOS price from continuing the rally and testing the remaining Fibonacci retracement levels of the 2018-2020 decline that reached 90%.

More EOS News

Yearn Finance Price Prediction: YFI targets $100,000

Yearn Finance price is reaching overbought levels, but the rally’s strength over the last two days projects further gains for the altcoin in the short term, potentially 40% from the current price.

More Yearn News

Top 3 Price Prediction Bitcoin, Ethereum, Ripple: BTC crashes, markets follow suit

Bitcoin price experiences a steep correction after failing to slice through the $59,545 resistance. Ethereum price respected the MRI’s sell signal and retraced 10% from its all-time high. XRP price slid below the 50 SMA at $1.426 and eyes a retest of the 200 SMA at $1.16.

More Crypto News


Bitcoin Weekly Forecast: Markets revert to mean, but BTC price remains indecisive

Bitcoin price shows considerable strength after springing from the recent crashes. Still, it is uncertain whether the current bullish impulse will morph into a new uptrend or lead to a more profound decline.

Read the weekly forecast