Billionaire investor Mike Novogratz says that the use of Bitcoin is limited to being a store of value rather than a medium of exchange.
For now, the use of Bitcoin as a currency is not on the horizon, billionaire investor Mike Novogratz believes. However, he says that many people are effectively using the main digital currency as a store of value with large capacity.
“I believe that people will not use Bitcoin as a transaction currency for the next five years,” said the founder and CEO of Galaxy.
Novogratz’s statements come at a time when Bitcoin is having the best streak of 2020. In recent days, the price of the cryptocurrency is around the USD 13,000 barrier as a result of PayPal’s announcements about digital currencies.
People Will Not Use Bitcoin as a Currency in the Short Term
The scope of Bitcoin leads Mike Novogratz to believe that people will not use Bitcoin as a currency in the short term. Only a small portion of the population of economically advanced countries know and use the cryptocurrency as a means of payment.
According to reports, only 7% of the population in the United States has ever used Bitcoin. In other nations, such as Vietnam or Turkey, the percentage is higher. However, less than 30% of the economically active population use Bitcoin.
In this regard, the currency needs to overcome the obstacle of its adoption to acquire the status of money. The investor considers that it should overcome this barrier in the next five or more years.
Of course, all this would depend on how long it takes for central bank digital currencies (CBDC) to come into effect. These would allow the tokenization of hundreds of millions of people, who would learn everything about digital currencies.
Besides, when people realize that there is a decentralized, secure, and more popular cryptocurrency like Bitcoin, those who join CBDCs will consider it as one of their favorites. This is especially possible due to its scarcity and constant appreciation, which makes it both different and superior to stablecoins. However, Bitcoin has only functioned as a store of value until now, says Novogratz.
A Store of Value
The above factors lead Novogratz to say that the use of Bitcoin as a currency is not on the agenda in the short term. However, he also takes into account the current function of this currency.
The expert notes that Bitcoin currently is, especially in this situation of pandemic and crisis, a store of value. One reason for a growing number of high-caliber investors to adopt it is the weakness of the US dollar. Besides, there are fears of the rebound in infections by the new coronavirus.
“Therefore, Bitcoin is going to keep growing as the digital gold,” says Novogratz. He also highlights that an increasing number of people will want a portion of Bitcoin as part of their portfolios.
In the last few days, the price of Bitcoin has grown by about 13% and has reached the USD 13,000 barrier. It is the best streak that the pioneering cryptocurrency has had this year.
By Willmen Blanco