Campbell Harvey considers that using the US dollar as a world reserve currency is very risky, which leads people to seek alternatives. Stanley Druckenmiller said that he values the privileged position that Bitcoin holds and the technology around it.
Dan Held, the head of growth at Kraken, recently said that Bitcoin could become a world reserve currency within about ten years.
Some Bitcoin proponents consider replacing the US dollar as a world reserve currency an ambitious but achievable goal.
Held stated that the pioneering cryptocurrency mainly contributes to avoiding censorship in developing countries. Meanwhile, Western people seek it as a hedge against the excessive printing of money by central banks.
He explained that the transition to hyperbitcoinization begins with retail users, who precede institutional investors and governments.
The permissionless nature of Bitcoin is one of the characteristics that is leading this transition. Held stated that the cryptocurrency is free money that only its holders can control.
The US dollar has been a world reserve currency since World War II ended. Data from the International Monetary Fund show that more than 59% of the current reserves of foreign banks are in US dollars.
Despite this, the position of the US fiat currency as a world reserve has weakened.
Like Dan Held, Other Experts Believe that Bitcoin Will Be the Next World Reserve
Campbell Harvey, a professor of international business at Duke University, said using the US dollar as a world reserve currency is increasingly risky. That situation led people to look for alternatives, as has happened with other world reserve currencies in the past.
In August 2020, the MicroStrategy company announced that it adopted Bitcoin as its main treasury reserve asset. Meanwhile, in early 2021, former Canadian Prime Minister Stephen Harper upped the ante on the pioneering cryptocurrency.
Harper suggested that governments, in addition to businesses, could use the cryptocurrency as a store of value. However, he spoke of it as part of a basket of assets that contains gold and the US fiat currency.
The Conviction that the Future is in Cryptocurrencies
American billionaire investor Stanley Druckenmiller, the founder of Duquesne Capital, recently said that he is betting on cryptocurrencies.
He not only values the privileged position that Bitcoin holds but also the technology around cryptocurrencies. He believes these assets will make it easier to find an alternative to the US dollar as a world reserve.
Five years ago, the investor commented that cryptocurrencies were a solution in search of a problem. However, he said that he now realized that continued monetary stimulus and hedging against inflation encouraged cryptocurrencies.
Many Bitcoin followers believe that the power of the cryptocurrency will allow it to end the hegemony of the US dollar. They predict that it will transform the monetary system from its roots, assuming that this is the end of a historical cycle.
The position of the US dollar as a world reserve currency is at risk due to expansionary policies, high debts, and deficits. That particular situation would allow Bitcoin to regain and take advantage of the ground lost by the fiat currency.
By Alexander Salazar
