Bitcoin is believed to be “healthy money” – a frequent chorus among the many popular supporters of cryptocurrencies. With a limited supply of 21 million and a network providing more than 120 alternatives per second of computing power, the consensus among industry watchers often leans towards becoming a global monetary superpower.

After only ten years in existence, the estimated value of Bitcoin is already the 11th largest global monetary base. Earlier in November, for the first time in history, Bitcoin became larger than the Russian ruble.

At a time when fiat currencies are undermined by economic tensions exacerbated by the Coronavirus pandemic, Bitcoin (BTC) continued to rally for most of 2020. In relation to the Black Thursday event in mid-March, there was a significant drop.

Since the economic recovery plans are likely to include large stimulus packages, these cash flows are expected to lead to a significant depreciation of the fiat currency. If Bitcoin continues the equivalent growth that many market analysts have predicted, it is poised to rise higher in the magazine Global Monetary Base.

The entire history of the world’s reserve currency corresponds to the fact that monetary bases are rising and falling. In Six Monetary Reigns, starting in 1450, no currency had dominated the world for more than 110 years. Given that the US dollar has been the global reserve currency for 95 years, some hope this is a sign that the situation may change soon.

Fiat coins are weakened
Despite the fact that the Russian ruble is the most gold-backed fiat currency in the global market, the monetary base is currently smaller than Bitcoin. With the ruble still falling against the US dollar, and BTC rising to $ 16,000, 1 BTC is now worth 1.2 million rubles. The next bitcoin move in the attack on the major currencies is the Canadian dollar. Based on current sales, it will exceed CAD if it exceeds $ 18,000 per BTC.

As mentioned earlier, Bitcoin already has its full-time high against seven national currencies, including those of Brazil, Argentina and Turkey. Rising inflation, exacerbated by the economic recession caused by COVID-19, has negatively affected many fiat currencies.

Currently, the full-time Bitcoin high remains at $ 19,665, which was reached during the December 2017 rally. However, for Bitcoin to begin challenging the world’s leading currencies such as the US dollar, Chinese yuan and Japanese yen, It should hit a six-figure price, according to John Todaro, head of research at institutional trading platform TradeBlock, who told Cointelegraph. . :

We can see that Bitcoin outperforms the other major fiat currencies, but it depends on how the size of the foreign exchange market is measured. The New Zealand dollar (“the kiwi”) is at the bottom of the group and most likely to circumvent Bitcoin, but its daily volume is over $ 100 billion, which is much higher than Bitcoin. Unlike other hard assets, Bitcoin shows a high volume of trading, so even though it has a moderately higher market cap, Bitcoin’s nominal trading volume may be slightly higher than it is today. ”
Bitcoin shines in the midst of a sluggish global economy
The equivalent advance required to push Bitcoin to these heights would also place BTC in the same category as gold as a trusted store of asset value. Many proponents of the popular cryptocurrency are already citing BTC as a convenient hedge against declining money supply and other forms of financial uncertainty.

Amid low interest rates in 2019, Travis Kling, founder and investment director at Ikigai Asset Management, warned that debt situation is now a recipe for a new global financial crisis. Central banks have maintained the growth trend to give the impression of a healthy economy, Kling said. When Kling made these comments, the world was still unimpressed by the coronavirus pandemic.

Bitcoin is often mentioned in discussions about a potential safe haven assets that could be used as a hedge against a new global recession. Amidst the COVID-19 panic over the asset sale, BTC did not survive the massive liquidation of Black Thursday, which indicates that it has not yet achieved the desired status. The largest cryptocurrency by market cap is down nearly 50% to a low of around $ 3,800. However, the price of BTC for exactly eight months increased by more than 300%.

Commenting on the possibility of Bitcoin reaching a new full-time high in the short term, Todaro indicated that it will be difficult to make sustainable progress towards the record by the end of 2020, adding: “This bullish cycle will give us good results. Apart from the previous long-term ATH, With public spending rising and halving in May, we are ready for one of the most convincing rallyes in Bitcoin history. ”

Source: CoinTelegraph

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