Looking into a future, where, ‘Bitcoin wins, fiat currencies lose. Game over’
“It will look very different 25 years from now.”
Currently, the US dollar is considered a global reserve currency with over 60% of all banks globally maintaining their reserve in the currency. According to Pompliano, that’s about to change “moving towards a multi-currency,” borderless world. He added,
“Don’t think it (Bitcoin) is nearly as competitive with the fiat currencies as people think it is.”
On the contrary, he explained that the dollar is guaranteed to lose value as central banks will have to continue creating more of the national currency. Additionally, he emphasized Bitcoin’s benefit of “zero switching cost” when used in any country. He thought it’s where the “purchasing power” is protected.
Likewise, Anthony Scaramucci, founder and managing partner of SkyBridge Capital, also expressed hope in Bitcoin taking over as the currency reserve worldwide. Hence, he predicted that the US will soon digitalize the dollar as well. Further, arguing about Bitcoin’s volatility, Scaramucci added,
“Bitcoin is volatile because it is in its early adoption stage. Amazon had the same volatile curve 24 years ago. But if you have put $10,000 on Amazon at its IPO, you would have $21 million today.”
In this context, Pompliano predicted two possible scenarios when it comes to Bitcoin and fiat currencies.
“One is that they’re in direct competition with each other, Bitcoin wins, fiat currencies lose. Game over.”
In the above case, the governments will have to digitalize fiat to stay relevant. In the second case, Bitcoin stays valuable even in a competitive multi-currency market. However, International Monetary Fund expressed concern recently owing to El Salvador’s Bitcoin adoption. IMF emphasized that Bitcoin adoption would threaten “macroeconomic stability”. Early this year, St. Louis Federal Reserve President James Bullard had said,
“I just think for Fed policy, it’s going to be a dollar economy as far as the eye can see.”
We don’t know if that will change yet. But, on a global platform, Pompliano agreed that the governments that embrace the technology will drastically outperform those that are last to adopt it.