Bitcoin will doom the dollar’s dominance
Bitcoin may not be at its best in terms of price, but its incredible resilience under macroeconomic pressure strengthens Bitcoin’s position above the dollar.
The Bitcoin Ecosystem
Starting from an obscure and confusing concept, Bitcoin has grown to become a billion-dollar industry and challenge the dollar empire.
While some believe Bitcoin is just a pyramid scheme that is likely to collapse anytime soon, a group of committed supporters predict that the leading cryptocurrency will one day dethrone the dollar. Lawrence Lepard is one of them.
The founder of Equity Management Associates, also known as a former venture capitalist, joined Natalie Brunell, one of the most famous female voices in the crypto sector, during the Coin Stories podcast on October 11.
Lepard emphasized during the interview that “We’re in the fiat money playoffs right now.”
According to the veteran investor, the Federal Reserve’s (Fed) commitment to further rate hikes to curb inflation even in a recession weakens the dollar’s monopoly.
However, this scenario is opportunistic for Bitcoin (BTC). There is a strong possibility that the largest cryptocurrency will replace the dollar to become a dominant global currency.
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“The Fed is losing it… They printed way too much money, inflation is red hot and they’re scared… It’s obvious to me that Bitcoin is going to be a dominant form of money.”
The history and growth of Bitcoin can be compared to Internet skepticism, and Bitcoin will eventually gain mainstream attention, Lepard emphasized. Bitcoin is better compared to gold, but the investor believed that it will eventually turn the precious metal.
In addition, Lepard issued a warning that the existing actions of the Federal Reserve have positioned the economy in the United States to a “Michael Burry moment”, a well-known figure in the financial world and is linked to the financial disaster that occurred in 2008.
Bitcoin has been hailed as having the potential to become a store of value and a hedge against inflation.
Although the performance of the asset in 2022 has not lived up to expectations, and the shocking resilience and strength of Bitcoin in the face of chaos, investors are more optimistic about the currency’s future.
Fed’s CBDC Will Support The Dollar?
Bitcoin is being taken seriously by institutional institutions, which could be a significant warning for the US fiat currency, but there must be reasons why the dominance of the dollar will not be overcome overnight.
Furthermore, the volatility caused by regulatory uncertainty is Bitcoin’s current biggest downside. This prompted the United States government, as well as other world leaders, to investigate central bank digital currency, or CBDC.
Central banks around the world are experimenting with CBDC use cases. China’s digital yuan is leading the CBDC race, having begun testing with the public distribution of CBDCs. China is also the first major economy to launch its own digital currency.
In 2020, the European Central Bank published a report on the proposed digital euro and began testing the possibility of minting a digital central bank currency. The ECB is pursuing plans to release a digital euro based on the results of the tests.
Given that Bitcoin is extremely volatile in the eyes of the government, this form of government-backed digital money will certainly support the US currency’s dominance.
The US is accelerating CBDC development while other countries such as China and India are accelerating.
US officials are moving closer to testing CBDC in the latest guidelines for the crypto regulatory framework, announced in September 2022, with the Fed in charge of conducting the study and trials.
The government is promoting real-time payments and intends to launch FedNow in the summer of 2023. However, this is a controversial undertaking because it raises privacy concerns and has the potential to destabilize the current banking system.
