Bitcoin has made governments less necessary as guardians of money

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The pandemic caught many governments and institutions off guard, and their knee-jerk reaction to fix things was a massive stimulus program and subsequent inflation of the money supply to historic levels.

Actions have consequences. While some of those consequences may take years to materialize, the pandemic has both catalyzed the growth of digital payments, and the mainstream adoption of bitcoin as a digital store of value, or even as a practical hedge against inflation.

This rapid shift to digital currencies positions bitcoin and central bank digital currencies (CBDCs) at the front of the digital revolution. With the accelerated institutionalization of this asset class, it’s probable that bitcoin, along with other major cryptocurrencies, will continue on their upward trajectory as other traditional currencies continue to inflate.

We expect bitcoin to continue gaining traction within institutional circles, and for bitcoin to appear on the balance sheets of many more public and private entities. As a result, the price of bitcoin will continue to appreciate.

Without bitcoin, there would be no altcoins, which have been one of the major drivers of innovation in the entire space. This is reflected by the decrease in bitcoin’s proportion of the total market capitalization in the crypto space.

Bitcoin has led to the decentralization of money, and the majority of financial services, such as borrowing and lending, which make up the cornerstone of most economies. It has underpinned the next generation of currencies, while showing that central banks are not necessarily needed as administrators or gatekeepers.

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Cryptocurrencies Bitcoin Digital currencies Digital payments Economy Central banks