Earlier this week, ABC News, a national news service in Australia produced by the Australian Broadcasting Corporation (ABC), presented the possibility of Bitcoin replacing the US dollar to become the world’s most dominant currency.
Over the past week, the price of bitcoin increased from around $1,900 to $2,500, demonstrating a 24 percent weekly increase in value. At its peak, global average bitcoin price broke the $2,700 mark for the first time, establishing a new all-time high. Since then, bitcoin price has had a minor correction and stabilized at around $2,450.
Throughout bitcoin’s strong rally and upward momentum, mainstream media outlets across the world including ABC News and the Australian Broadcasting Corporation have provided extensive coverage on the development of bitcoin price, justification of value and the rising demand from both individual and institutional investors.
Major financial service providers, investment firms and mainstream media outlets including Fidelity Investments and CNBC have described bitcoin as digital gold and a safe haven asset primarily due to its decentralized nature. Because the value of bitcoin is solely reliant on its market and the demand from traders and investors, bitcoin has been described as a safe haven asset which investors should mandatorily include in their portfolios to avoid potential market instability and economic uncertainty.
As prominent gold investor and the founder of precious metals broker GoldSilver.com Mike Maloney explained:
“You want to have an alternative monetary system that is already ready to go and those actually exist today. They are called cryptocurrencies. It started with Bitcoin. There have been several others that have been introduced. I own a few of them. I don’t own a lot of cryptocurrencies but I think it is something that is necessary to be prepared because if the monetary system fails, you’ll be able to do transactions right away with other people and you can do them over long distances. You can do them over the Internet just like you pay with your credit card today.”
ABC News and its analysts claimed that bitcoin could replace the US dollar and other reserve currencies for the exact same reason Maloney recommended investors and his clients to purchase bitcoin as a long-term investment and a safe haven asset.
Bitcoin is the alternative monetary system to the global banking and financial systems that exist today. The Bitcoin network and its peer to peer protocol enables anyone in the world, both banked and unbanked, to facilitate and process transactions without the existence of intermediaries and third party service providers.
For bitcoin to surpass the value of a reserve currency such as the US dollar, it needs to achieve a multi-trillion market cap and currently, the market cap of bitcoin is at around $40 billion.
Bitcoin is still a relatively young technology at an early phase in development. It evidently has to mature over time and solve scaling issues in order to become a digital currency and digital cash system as bitcoin creator Satoshi Nakamoto outlined in the original bitcoin whitepaper.
Already, bitcoin has surpassed the market cap and user base of some fiat currencies in Europe and Americas, as CCN reported before.
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