Interest in cryptocurrencies remain a great prospect for the space to take encouragement from, but it seems still far away from being termed as the finance currency of the future. In the current status quo, the U.S. dollar is regarded as the most valuable financial reserve. However, not long ago, Bitcoin did show great promise as prices skyrocketed to near $20,000 per BTC in 2017. Since then, fighting culminating battles against regulations, adoption and a general negative outset, it seems as if it will not become a pertinent savior of the world finance system for years to come.
Sharing opinion with BlockPublisher on the matter was Co-Founder of investment consultancy firm Delphi Digital, Kevin Kelly, who was also of the view that Bitcoin does not seem to be a replacement to fiat currencies. However, he shared belief that it will form a league of its own as an alternative to accepted currencies. He said:
While we remain optimistic on the long-term outlook for bitcoin, we do not believe it will replace traditional fiat currencies (i.e. U.S. Dollar, Euro, etc.), especially in the coming decade. We do, however, hold the view that bitcoin will offer the world a viable alternative to government-backed
Explaining as to why he believes Bitcoin and other cryptos will not make it to be considered near to fiat, Kelly stated that merely the size and depth of the financial market and global commodities linked to the USD makes it impossible to envisage anything other than the dollar itself. He continued:
Currently, the U.S. Dollar is still widely regarded as the global reserve currency for numerous reasons. The Fed has become one of the most powerful institutions on the planet. While price stability is one of the Fed’s core mandates, few alternatives exist today to securely store wealth without the dampening effects of inflation, even as price increases the last several years have remained rather tame relative to prior cycles.
That being said, it is also to be believed that Bitcoin will make it as an alternative to pertinent currencies after gaining regulation and thorough moniterization. Kelly also shared his view that it will serve as a check on government policies regarding financing all over the world. He said:
As an alternative reserve currency, bitcoin could encourage governments and government agencies to exercise more responsible fiscal and monetary policy for fear of losing market share to a programmable digital currency. This is not to say bitcoin will be become the world’s universal currency, but we believe it could serve as a check on government policy, especially in less-stable, developing economies.
With the current ongoing, the crypto space could be expected to head down a barrel and strive to exist over the coming years. However, once the bear period is driven out of, there would be greater prospect to come, either as a replacement or an alternative to the fiat currency system of the world.