Golden Finance reports that Brian Armstrong, the CEO of Coinbase, recently expressed a bold view that he believes Bitcoin has the potential to become the world’s reserve currency.
Armstrong stated in the relevant discussion that he believes the relative dominance of the US dollar will be further weakened in the future. He pointed out that since the US dollar was no longer backed by gold, its decline has become inevitable. In his view, for legal tender to retain its value, it must be backed by hard currency. Once this connection is broken, legal tender is bound to decline.
I know that many people, upon hearing me say that Bitcoin might become the new world reserve currency, would think it’s crazy or consider it an unconventional viewpoint. But I do think there is such a possibility. Armstrong said in an interview.
If Bitcoin wants to become a global reserve currency, its technological advantages, global influence and inherent economic characteristics are important foundations. Armstrong mentioned, “Currently, only about 200 million people worldwide have tried cryptocurrencies. Although this number is not small, it is still far behind the influence of the US dollar.” He also emphasized the inflation risk faced by fiat currencies without physical support, “There have been tens of thousands of fiat currencies throughout history, and they will eventually decoupled from the hard currency behind them and gradually depreciate due to inflation.”
Of course, not everyone agrees with Armstrong’s point of view. Traditional investors like Warren Buffett and Charlie Munger are firmly opposed to Bitcoin. They believe that Bitcoin is a non-productive asset with no practical use and therefore can never replace the US dollar. Buffett once publicly called Bitcoin “poison on top of poison”, and Munger also supports this view. He said, “In my life, I try to avoid those stupid, evil and things that make me feel inferior to others, and Bitcoin has all of these.” First of all, it is very stupid because it still has the possibility of returning to zero. Secondly, it is very evil because it undermines the Federal Reserve system. Furthermore, compared with the leaders of China, it makes us seem very stupid. The leaders of China have wisely banned Bitcoin.
Peter Schiff is also one of the investors who have long been pessimistic about Bitcoin. He questions the effectiveness of Bitcoin as an asset, claiming that it neither generates returns nor has interest or actual value. He compared Bitcoin with traditional asset classes such as real estate and gold, believing that investing in Bitcoin is a “must-lose game”.
Despite investors’ polarized views on Bitcoin, the cryptocurrency sector has continued to expand across various industries over the past decade, with its total market value exceeding one trillion US dollars. With the changes in the global economic situation and the development of the cryptocurrency market, whether Bitcoin can become the world’s reserve currency as predicted by Armstrong remains to be seen.
Related Topics:
