CAN BITCOIN TAKE THE PLACE OF THE DOLLAR?

We have seen how Bitcoin has reached unexpected and astronomical values, where nobody imagined it could touch $60,000 per unit, completely changing the history of the most used cryptocurrency in the world. Bitcoin mining is best started using the bitqt platform.

The behavior of Bitcoin in the digital financial market makes the other digital currencies follow in its footsteps, assuming if it all rises and if the opposite is the case, they all move after the first in cryptographic market capitalization.

The collapse of prices during 2022 has been abrupt, leading Bitcoin to a price that decreased more than 60% from its last historical maximum registered in 2021, which has undoubtedly reduced the other digital instruments, even leading them to disappear.

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Bitcoin characteristic volatility

Before the latest bitcoin and cryptocurrency price surge, in a survey of mostly bank executives, Forbes found that most thought bitcoin and digital assets could replace fiat currencies like the US dollar in the next five or ten years.

On the other hand, other financial analysts warn that there is still a long way to go before cryptocurrencies have a massive adoption that makes them huge as a unit of account and currency of exchange, as well as a store of value.

This process began to accelerate, mainly after the decision of the payment company PayPal to incorporate Bitcoin as a means of payment. Later, several firms, including Tesla, began to flirt with Bitcoin as a payment currency.

At the same time, we must not fail to highlight the environmental challenges, considering the high energy consumption required by mining currencies such as Bitcoin.

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It should be remembered that the price of the leading crypto assets tends to experience high volatility despite showing a long-term upward trend.

Blockchain and central banks

The modernization of traditional banking is under pressure due to the versatility and security offered by the blockchain in terms of recording and monitoring of operations, where no one can alter them, which has led these institutions to consider the creation of digital currencies to diversify their service portfolio and streamline international processes to compete with the cryptocurrency model.

We could be facing a scenario of updating traditional banking, where the processes could be more transparent, less cumbersome, and without so much bureaucracy involved, as well as the opportunity is given to users to be the owners of their capital without the possibility of executing a transaction is in the hands of third parties.

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It is projected that the euro and the digital dollar will not replace each other’s fiat currency; they will only complement the need to make electronic payments.

Bitcoin is a market capitalization that came out of nowhere

While cryptocurrencies have the potential to become an alternative asset class, their prices are likely to remain highly volatile and attract more speculative investors, the Swiss Financial Services Company (UBS) noted.

Massive dollar liquidity and network effects are the most substantial headwinds against Bitcoin’s rise, Voorhees told Decrypt, noting that Bitcoin has gone from nothing to a trillion-dollar market cap for a decade. . “Bitcoin is gaining its network effect over time,” he said.

There are still many people who do not know what cryptocurrencies are, and even more who have heard of them but do not understand them; only when this happens Bitcoin or another cryptocurrency will have taken over.

Bitcoin is here to stay, leading the digital cryptocurrency market, demonstrating year after year how its volatility has shown it to have incredible value and still without knowing how much it will be worth in a few years.

Conclusions

All this has created significant uncertainty, and for this reason, it has come to be thought that it can replace one of the most important currencies in the world, but to achieve this goal, a massive adaptation to a new digital world must occur market for many, uncertain for others.

It is not as easy as it is said, but every day we are more on the path to transcending a digital world controlled by this crypto-asset market.

At the moment, it is hard to assume that cryptocurrencies can replace the dollar or any other strong currency on the market; however, it does not have any support; It is the currency that countries recognize as par excellence.

Over the years, electronic transactions will continue to replace the use of physical money, where cryptocurrencies will act to position themselves as the digital currency par excellence.

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