Morgan Stanley Strategist: “Bitcoin Will Gain From Distrust In Traditional Finance”
Coinputin.com – Bitcoin (BTC) poses a significant threat to the US dollar, the world’s reserve currency, according to a strategist at major American investment bank Morgan Stanley.
Ruchir Sharma, chief global strategist at Morgan Stanley Investment Management, believes the dollar’s reign will come to an end because of global distrust in traditional finance, and Bitcoin will benefit from this lack of confidence.
Sharma gave a brief summary of the history of world reserve currencies in a December 9 article in the Financial Times, noting that by the beginning of 2020, this status of the dollar had lasted 100 years. Other major global fiat currencies, such as the Euro or Chinese yuan, have failed to gain overall confidence, according to the strategist. The strategist stressed that the dollar is not a successor.
“Bitcoin could threaten dollar’s superiority”
A new class of decentralized competitors – cryptocurrencies such as Bitcoin – could threaten the dollar’s superiority, Sharma said. Bitcoin, at the height of the epidemic, has quadrupled its price since March, making it one of the top investments of 2020. The strategist also noted that the US Central Bank continues to print money:
“THE DOLLAR’S REIGN WILL PROBABLY END WHEN THE REST OF THE WORLD BEGINS TO LOSE CONFIDENCE THAT THE UNITED STATES CAN CONTINUE TO PAY ITS BILLS. [ … ] PRINTING MONEY IS LIKELY TO CONTINUE EVEN WHEN THE PANDEMIC PASSES. RELIABLE OR NOT, BITCOIN WILL BENEFIT FROM GROWING DISTRUST IN TRADITIONAL ALTERNATIVES.”
Sharma also noted that Bitcoin has begun to make “progress on changing the dollar as a medium of exchange.” The strategist said Bitcoin adoption has been steadily increasing from investment to international trade and other use cases. ” In recent weeks PayPal and its subsidiary Venmo have started storing Bitcoin with the eye to accepting it as payment next year, ” he added.
Strategist warns central banks to pay more attention to monetary policy if they want to retain their positions of power:
“BITCOIN’S RISE MAY STILL BE A BUBBLE, BUT EVEN IF IT DOES EXPLODE, THE CRYPTOCURRENCY INTEREST SEEN THIS YEAR SHOULD SERVE AS A WARNING TO ALL THE STATES THAT PRINT MONEY, ESPECIALLY THE UNITED STATES. DON’T ASSUME THAT YOUR TRADITIONAL CURRENCIES ARE THE ONLY STORE OF VALUE OR INSTRUMENT OF EXCHANGE THAT PEOPLE CAN TRUST.”