US publisher Steve Forbes has attacked bitcoin’s solid supply, saying that this feature enhances the crypto’s ability to “meet the needs of a growing economy.” He also argues that bitcoin cannot replace the dollar because it is currently too volatile to function as money. Forbes emphasizes that money only works best when it has a stable value.
New respectable investment class
According to Forbes, cryptocurrencies can only challenge existing money if their value is tied to that of gold or the Swiss franc. In his argument case However, against the idea that bitcoin will eventually replace the dollar, Forbes admits that crypto “is now seen as a respectable investment class.” He adds that “financial institutions are adding it to their portfolios.”
Forbes explains this shift to bitcoin:
People pile up due to a lack of confidence in government fiat currencies. The Federal Reserve and other central banks have crushed interest rates and are printing unimaginable amounts of money to pay for Covid measures and boost damaged economies.
According to the publisher, some of these measures, which are inflationary, could be the possible reasons why bitcoin has now become “investors’ darling.” In addition, Forbes also acknowledges that some enthusiasts view bitcoin as “the new gold,” while others believe it will “eventually replace the dollar.”
Impact of Bitcoin Volatility on Contracts
Nonetheless, they think this is not going to happen because of how bitcoin’s volatility could potentially affect the contracting system. The publisher uses the example of a residential mortgage to illustrate why cryptocurrencies cannot be used in contracts that he believes are “essential to an economy.” Forbes explains:
Suppose you took out a $ 250,000 mortgage in March, today you owe the bank nearly $ 2 million.
Forbes suspects that no one in “common sense” would sign a long-term contract based on bitcoin.
Do you agree with Steve Forbes’ sentiments that bitcoin will not replace the dollar? You can tell us what you think in the comments section below.
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