According to Stefan Molyneux, a highly regarded Canadian podcast host, it is more important to recognize the free fall of fiat currencies, more so than to acknowledge the exponential growth rate of Bitcoin.
“It's not so much that Bitcoin is going through the roof - it's that fiat currencies are in free fall, but only Bitcoin is noticing.”
The decline of fiat currencies
For many decades, governments have had absolute control over the global finance sector and monetary policy through the fiat currency system. Through it, central banks such as the US Federal Reserve have obtained the ability to inflate the supply of reserve currencies and to manipulate the world’s most widely utilized form of money.
In an interview with Fox Business, major electronics retailer Overstock CEO Patrick Byrne stated that fiat currencies will continue to fall over the next few years, as investors and the market move onto separate money and state.
As fiat currencies decline, the only form of decentralized currency that is Bitcoin and other cryptocurrencies in the market, will eventually overtake reserve currencies.
“You think that’s a bubble? What do you think that fiat currency you carry around in your purse is? This dollar stuff, it’s just some fiat currency based on … the surplus taxing authority of the US Treasury of which I assert there is zero ... It’s about time the world switches to real money. Either gold or Bitcoin,” said Byrne.
Currently, the two forms of money or assets that are not subjected to the control and manipulation of governments are Bitcoin and gold. But, as demonstrated by the Indian government in late 2016, because of its physical attributes, gold can be confiscated and repossessed by the authorities at their will.
With Bitcoin, confiscation of user funds and assets is not possible, if users store their Bitcoin on a non-custodial platform in which they have full control over their private keys and funds.
One major advantage Bitcoin has over gold is its transportability. Gold is a viable store of value given that investors can store large amounts of money in the asset. But, it is difficult to transfer gold, especially through borders.
Bitcoin will continue to prosper as fiat currencies decline
Considering that Bitcoin remains as the only viable alternative to fiat currencies, the decline of government-issued money will continue to lead more investors and general consumers into the Bitcoin market.
As such, Byrne noted that Bitcoin price could reach $1 mln in the long-term if Bitcoin begins to take over reserve currencies and challenge the gold market.
“We have all these currencies since Bretton Woods, fluctuating against each other, and maybe the dollar hasn’t gone to zero against these currencies but all of them have gone down 95 percent ... versus something that they can’t control like … gold and Bitcoin. So Bitcoin may be on its way to a million for all we know,” adds Byrne.