The world of finance is in a state of flux, with the rise of cryptocurrencies like Bitcoin challenging the traditional dominance of the US dollar. But will Bitcoin ever replace the dollar as the world’s reserve currency? Experts have differing opinions on this matter. In this article, we’ll explore the arguments for and against Bitcoin replacing the dollar, and discuss the potential impact of such a shift.
Bitcoin to Replace the US Dollar, Says Jack Dorsey
Jack Dorsey, the CEO of Block and co-founder of Twitter, is convinced that Bitcoin will replace the US dollar. He also predicts that the largest cryptocurrency by market cap will reach a price of $1 million by 2030.
During a recent event in Italy, the entrepreneur stressed that Bitcoin’s dominance over the financial world is inevitable. At the same time, he pointed out that despite this inevitability, it cannot be expected to happen in the immediate term. In this sense, he expresses that this new reality will take some time to consolidate.
Jack Dorsey on Bitcoin Replacing the US Dollar
“It will take some time, but people will slowly come to realize the value of this system and why it is so powerful and why it could potentially be a complement or replacement to the US dollar that rules everything and is currently being challenged by the Chinese yuan,” Jack Dorsey.
The entrepreneur defended his thesis that Bitcoin allows people to choose what suits them best. This is in stark contrast to the US dollar or the Chinese yuan. The latter are arbitrarily imposed on citizens, he insinuated.
Will Bitcoin Really Replace the US Dollar?
While it is difficult to determine whether or not Bitcoin will replace the US dollar, for the entrepreneur there is no doubt. The qualities of the largest cryptocurrency make it an ideal asset to fulfill the role of global reserve currency. Among the most outstanding elements of this nature are security, economy, and scarcity.
He emphasizes that the decentralized nature of the digital currency gives it advantages that central bank currencies cannot offer. Regarding the price, the entrepreneur is completely convinced that it will reach $1 million in a relatively short period of time.
As people discover and understand Bitcoin, adoption will continue to rise. Considering the scarcity of the currency (21 million total issuance), mass adoption will lead to a significant appreciation of the BTC market price. Although few doubt the possibility of the currency reaching a price of one million or more, the fact of replacing the dollar leaves doubts.
The first thing that comes to mind is that most of the issuance is in the hands of whales. The low scalability of the network and doubts about second layer solutions increase the concern in this regard. However, companies like Block itself are working tirelessly to create the conditions for Bitcoin to replace the dollar.
Bitcoin Rally to Come in October, Analyst Says
Despite the strong selling pressure and volatility of Bitcoin, investors and enthusiasts are convinced that the rally will inevitably come. One of them is the renowned analyst Benjamin Cowen, who bets that the pioneer digital currency has much more to rise. However, he considers that a reasonable amount of time must pass before this happens.
The strategist expresses on his YouTube channel that the pattern will be similar to that of previous bull cycles, when this cryptocurrency interrupted its upward trend. Generally, previous rallies were accompanied by relatively prolonged periods of intermediate declines, he suggests. In this sense, the current bearish trend could extend until September or possibly October.
He takes as a reference the graphs of 2019, when Bitcoin entered a bearish trend similar to the current one that lasted for 202 days. He affirms that the same pattern could be formed on this occasion and with it the low prices of the currency would remain for a few months. The positive news is that this time seems favorable for investors.
If the rise is inevitable, then a considerable period of low prices would create better conditions for accumulation. The expert says that no one should be alarmed by a prolonged upward trend, since it has already been underway for several months.
No Immediate Bitcoin Price Rally, Experts Say
A similar assertion, that the Bitcoin rally will not come in the immediate term, is held by other experts. One of them is the CEO of CryptoQuant, Ki Young Ju, who also considers that the queen cryptocurrency will reach highs in 2025. However, he expresses that the current correction is far from over and the price of BTC could touch a bottom of $47,000 per token.
Both experts agree that the exchange value of the currency will decline, but only temporarily. In Cowen’s case, he affirms that the trend of approximately 200 days is already underway. In fact, he estimates that it has been going on for 114 days. Therefore, by September or October it would already reach its final stages.
Although the expert warns that an identical situation to that of 2019 should not be expected, he considers that it will at least be very similar. There are fundamental elements that coincide with this technical analysis that the bull trend will arrive at the end of the year. Among them, the possible victory of Donald Trump in the United States presidential elections stands out.
Bitcoin Price Could Drop to $47K, Says CryptoQuant CEO
In recent hours, the prices of major cryptocurrencies appear to have stabilized after the dramatic crash last Friday. However, some experts believe that the storm is not over and the price of Bitcoin could drop to $47,000 per coin. This prediction comes from the CEO of the CryptoQuant portal, Ki Young Ju.
Ju believes that this possible decline is not cause for alarm, as the bull market is not in doubt. In this sense, he affirms that the bull-run will extend until the first months of 2025. In a post on the social network X, Ju comments that his bullish view does not change despite the fact that the pullback has not ended in the short term.
I believe the #Bitcoin bull cycle will continue until early next year.
For those trading in spot, it would be wise to DCA while keeping in mind that it could drop to $47K from here.
If you are not an experienced futures trader, do not open high-leverage long or short positions…
— Ki Young Ju (@ki_young_ju) July 5, 2024
“I believe that Bitcoin’s bull cycle will continue until early next year,” Ju comments. In addition, he suggests that this is an ideal time to apply the Dollar Cost Average (DCA) strategy in spot trading. This strategy consists of buying constant amounts at regular time intervals (weekly, bi-weekly, etc.) regardless of the price.
In general, the results of this strategy are usually remarkably positive in the long term. Unlike futures strategies, the DCA implies less risk of loss.
Bitcoin Price Should Not Depend on Government Sales
In a separate X post, Ju highlights that the price of Bitcoin should not be affected by government wallet movements. A recent CriptoTendencia paper assesses the potential threat of governments to the stability of the cryptocurrency market. This study concludes that owning more than $18 billion in BTC gives governments the power to manipulate prices and trigger a bear market whenever they want.
This bearish power is compared to the $9 billion in Mt. Gox refunds, which caused panic among investors. With double the funds, governments have the potential capacity to cause a lot of damage. A clear example is the sending of thousands of coins to exchanges by the German government.
Although these elements are worrying at first glance, Ju considers that the capacity of governments is overestimated. He explains that since 2023, some $224 billion has flowed into the crypto market. Meanwhile, the amount of BTC in the hands of governments amounts to $9 billion, according to CryptoQuant data (according to Arkham, it is more than $18 billion).
In any case, according to Ju, government ownership represents only 4% of the total capital in BTC since 2023. With this in perspective, he asserts that the impact of these whales is overestimated. “Don’t let the FUD selling of governments ruin your trades,” he warns.
Conclusion
The future of Bitcoin and its potential to replace the US dollar is a topic of much debate. While some experts believe that Bitcoin has the potential to become the world’s dominant currency, others are more cautious. Only time will tell what the future holds for Bitcoin.
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