It’s a growing topic in which not many people know too much about. Depending on who you ask some say it’s the Wild West of the financial industry while others say it’s a potential alternative ability to make a fortune.
Wherever your position is on the Cryptocurrency (crypto) industry, it won’t be long till you see cryptocurrencies everywhere. My prediction is that it’s only going to get used more as an alternative form of making a payment anywhere in society alongside the traditional option of fiat currencies.
As the Statista article has pointed that the, “user base of cryptocurrencies increased by nearly 190 percent between 2018 and 2020, only to accelerate further in 2022”
This further increases the growing widespread use of alternative finances. Fortune 500 companies are also increasingly interested to adopt or work with the use of crypto.
As the Statista article puts it, “crypto adoption continued as companies like Tesla and Mastercard announced their interest in cryptocurrency.”
As time goes on there are some fair questions to ask about what kind of role the industry in itself will take in the future.
As the traditional value of the dollar currency is in decline, questions arise about the possibility of other other ways to mitigate the issue ranging from fiscal, monetary policies or looking into alternative financing options such as the growing cryptocurrency economy.
One prominent question stands: if Bitcoin, one of the largest cryptocurrency in its class to exist, will ever become another form of fiat currency.
There are rifts between the community of economists and experts surrounding this question and others alike. As this Money.com article has shown, “There’s a rift between many economists and crypto experts on whether bitcoin is going to last as an asset class.”
As the Money.com has also added, “Depending on who you ask, though, that possibility might not actually matter. Many economists argue that there’s no justifying bitcoin's value. Dr. Bob Johnson, an economics professor at Creighton University, contends that bitcoin has a high price, but because of its lack of accreditation and use case, it lacks any inherent value.”
One of the main reasons why Bitcoin isn’t as legitimate as the traditional currency is because it’s not fully backed by the US government.
As Johnson has said, “ People have to agree that it has value. The U.S. dollar has value because it has the full faith and credit of the U.S. government. Bitcoin doesn’t have that.”
He also goes on and “argues that even if the world were to agree that bitcoin has a certain value, there is little incentive for the U.S. government to accommodate it as a currency.”
Would that change if Trump wins the presidency? According to AP News, Trump on an X video post he announced, “We’re embracing the future with crypto and leaving the slow and outdated big banks behind.” Trump is planned to also host his address on the subject at 8 p.m. EDT next Monday the 16th from his Mar-a-Lago home.
There’s still many unknowns to cover but time will soon tell how the US will handle or treat a budding parallel financial and economic industry from within.
Details are slowly emerging about how this would affect the future of the cryptocurrency industry and the rest of the financial world as we know it.
Its just as interesting that it’s the first time in history for any candidate running for the presidency to embrace and work with cryptocurrencies as part of policy.
Circling back, despite the ongoing back and forth debates, regardless of whether Bitcoin becomes another legal tender, there are many other uses Bitcoin can be used for.
One such use would be a hedge against overall inflation. As pointed here from the Money.com article Martin Leinweber, digital asset strategist at MarketVector Indexes, “unlike Johnson, Leinweber argues that bitcoin’s current use as a store of value is the coin’s use case, and so it doesn’t matter whether it becomes a currency or not. says that “bitcoin’s value as a hedge against economic instability”
Even if Bitcoin doesn’t quite qualify as an alternative for legal tender there are other assets that are offered within the industry that may be considered. As Leinweber says, “stablecoins will be the payment solutions, not bitcoin,” adding that “understanding bitcoin’s role as akin to digital gold, rather than as a primary medium for payments as initially proposed, is what investors will appreciate about bitcoin and give it value.”
As the industry continues to grow, the future continues to provide options for us financially. We will then see what happens next as US citizens witness a new frontier of de-centralized and other potential alternative forms of financial freedom.
The Freedom to have and choose more financial tools at your disposal should be embraced. I believe each financially-conscious individual should know what’s best for their financial situation at hand.
Whether one chooses the classic financial system, the Crypto markets or both, the time to support innovation of our economy has come. Financial Independence without worrying about the traditional big banks or governments looking inside your pockets can be a thing of the past.