Bitcoin has emerged from the dead so many that it makes Lazarus look lazy. But its critics persist: “Bitcoin,” they claim, is a “bubble”, a “risky speculation with very little chance of ever becoming an established money form.”
However, Bitcoin’s obituarists don’t just make mistakes. They are cast iron, copper-bottomed and 180 degrees wrong. Bitcoin’s success can be considered a certainty, as it isn’t speculation. It’s as certain as any thing in finance.
Why is this so important? As any Bitcoin supporter, my belief in the brilliance of Bitcoin at the technical level is the same as the others. I believe that bitcoin has fundamental value for financial sovereignty. Its ability to transfer wealth over time is what I believe. It is, perhaps most importantly, the best way to survive the current tectonic economic shifts. We are not the only ones who believe in Bitcoin. Everybody, from governments and institutions to ordinary savers to individuals, is now accepting Bitcoin. Despite all the attention being paid to price, Bitcoin continues its rapid and easy adoption of cultural and structural milestones.
There is plenty of evidence to support Bitcoin’s rise as a reserve currency. You just need to look.
The Orange Standard
There are plenty of disquisitions about Bitcoin’s technical brilliance and theoretical genius. You don’t need to look far. I’ll be brief.
Half a century ago, fiat replaced the gold standard. The world’s central bankers and bankers discovered many ways to debase the currency. The latest example of paper money’s flexibility is President Biden’s 3 trillion splurge. As more people are realizing, Bitcoin cannot be inflated. There is a hard limit of 21 million coins. It is impossible to create or print more Bitcoins from thin air.
Other advantages of Bitcoin include the fact that it is digital and does not require any physical infrastructure. There are no vaults, there are no highly-guarded aeroplanes or vans and no Fort Knox. In just a few clicks, you can transfer billions of dollars. The fact that Bitcoin isn’t controlled by a central authority has made any attacks (which have been many) ineffective.
This is the reason why Bitcoin should be the world’s reserve money. Let’s now see why.
The Road to Reserve Currency
It’s already happening so we don’t have to speculate on Bitcoin’s rise as a reserve currency. It is not yet being purchased by governments or issued bonds in BTC. Who says that you have to get approval from the government before you can put funds in a safe place?
Many large public companies have started to convert their fiat funds into bitcoin. Why wouldn’t they? Microstrategy CEO Michael Saylor said that holding cash is similar to sitting on an ice cube. We are already on the way to reserve currency status with businesses like Tesla, J.P. Morgan, and Goldman Sachs opening trading desks and buying large amounts of Bitcoin.
There won’t be a big “Aha!” moment. There will be no big ‘Aha!’ moment when the Fed admits that fiat is a mistake and converts to bitcoin. There doesn’t have to be. Everything will be a lot easier when Bitcoin is adopted by private companies, corporate treasures, and everyday citizens.
Another key driver for adoption is often overlooked. It is often forgotten that politicians can also be people. If they are smart, their financial advisors will urge them to protect themselves against the coming one-world currency, one-world tax system and ever-surveilled economy with bitcoin. As governments continue to condemn bitcoin, while its members own holdings of the cryptocurrency, it will be more obvious that they are hypocrites.
This is not meant to suggest that Bitcoin will be following a single path to hegemony. Our community is divided on how to develop the Bitcoin network: some believe it’s already perfect, while others feel it needs more work on UX, infrastructure, and blockchain-based financial service. The same goes for regulation. Opinions are divided about whether or not bitcoin should be regulated.
All these perspectives are wise. However, bitcoin will continue to develop and it is certain that any attempts to stop it will fail. India and Pakistan tried to ban bitcoin transactions, but were defeated by the courts or by technical difficulties.
Regulators are inevitable, in my opinion. Preemptively aiming for industry-led and sensible frameworks is the best way to go. I hope governments will have constructive conversations with people who are familiar with Bitcoin’s financial and technological characteristics. We cannot delay the inevitable, but we can create a new economy that is compatible with our digitally connected lives by engaging and cooperating.
Regulating Bitcoin is slow and often tedious. We can deliver solutions that work for everyone if we get clarity on how governments will view Bitcoin. Along with other financial experts, we are always ready to interact with regulators and governments so that the inevitable can be achieved.