Bitcoin‘s global reserve currency credentials are growing by the day. The flagship crypto has given the U.S dollar a run for its money in 2020. While the greenback’s value has plunged to two-year lows, the cryptocurrency has powered to record highs and showing no signs of slowing down.
Bitcoin’s Meteoric Rise
Bitcoin’s value has already risen to over $350 billion after gaining more than 12% over the past week. While its value still lags gold’s value that stands at around $10 trillion, it is the rate at which its value is increasing that has caught many people’s attention.
Head of Research at Blockchain.com, Garrick Hileman, expects Bitcoin’s market cap to climb to record highs of $1 trillion going by the phenomenon run registered in 2020. For a $1 trillion market value, Bitcoin price will have to rise to $54,000, a 130% rally from current levels.
The powering through record highs of $20,000 and to highs of $23,000 has come at the back of increased institutional investments and interest. Payment Giant Square has already invested $50 million in Bitcoin, with investment firm MicroStrategy investing close to $200 million on the crypto. Similarly, PayPal has already integrated Bitcoin in its payment apps, making it possible for people to buy, sell, and hold it.
Major institutional players led by BlackRock, Bill Miller, Jack Dorsey have also taken a keen interest in Bitcoin. Likewise, retail investors are also betting big on the flagship cryptocurrency, all but helping pump its market value. As it stands, more than 100 million people own digital assets.
Dollar Reserve Currency Status
Even as the dollar remains under pressure from digital assets such as Bitcoin, experts expect the Federal Reserve to digitize the world’s most popular reserve currency. While the FED has stayed clear of the digitization drive, it is expected to make the giant leap sooner than later.
Amid Bitcoin’s blockbuster run, the U.S dollar still retains the status quo as the global reserve currency thanks to its dominance through the swift mechanism and the global financial system. As the U.S government continues to raise debt at attractive interest rates, its status remains well safeguarded.