BY DAYO ADESULU
The Head of Emerging Markets and Chief Global Strategist, at Morgan Stanley, Mr Ruchir Sharma has said that the Bitcoin is fast replacing the American dollars, adding that the cryptocurrencies have come to stay.
He said: ”Bitcoin is making progress towards replacing the dollar as a medium of exchange, adding, ”Regardless of where the price of bitcoin goes next, cryptocurrencies are here to stay as a serious asset class.”
Last week, Sharma disclosed this in his published report on the Morgan Stanley website entitled “Why Crypto Is Coming Out of the Shadows”
The financial expert who made the assertion on the financial strengths of bitcoin over the dollar explained that: “Despite the jitters natural in a global pandemic, cryptocurrencies are rapidly gaining popular support as alternatives to gold (a store of value) and the dollar (as a means of payment),” he began. The strategist elaborated:
”We see fundamental reasons to believe that — regardless of where the price of bitcoin goes next — cryptocurrencies are here to stay as a serious asset class.
“There is growing distrust in fiat currencies, thanks to massive money printing by central banks.” Another reason is “generational,” as young people view cryptocurrency as an improvement over metal coins.
“The worst knock-on cryptocurrency as a store of value is its volatility, but unflinching demand from millennials has helped lower the volatility of bitcoin, even during the pandemic.”
“The open-source software behind Bitcoin makes it more transparent, transferrable and trustworthy than paper money printed by governments.”
“This crypto-confidence may reach even deeper in emerging markets, where distrust in centralized authority runs high.”
He continues: ”Governments have been slow to recognize this evolution … Bitcoin is also starting to make progress on its ambition to replace the dollar as a medium of exchange.
”When the pandemic hit, the dollar was the world’s preferred reserve currency. However, “led by the Fed, every major central bank has been printing money madly to keep economies afloat during the pandemic, undermining confidence in all national currencies,” he described, adding that 20% of “all dollars in circulation were printed in 2020, and that binge was a huge boost to the appeal of bitcoin.”
”Today, virtually all bitcoins are held as an investment, not used to pay bills, but that is changing.
“Last year popular payment platforms started accepting bitcoin and other digital currencies, a major step forward in their campaign to challenge the dollar.”