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October 5, 2022
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Bitcoin

Bank of Singapore: “Bitcoin will replace gold” –

The Bank of Singapore, Asia’s largest private bank, says Bitcoin will replace gold. Cryptocurrencies have the potential to create a new digital standard for the storage of value.

Will bitcoin replace gold?

The bank’s chief economist, Mansoor Mohi-uddin, told the portal in an interview The National Newsthat cryptocurrencies still have to pass some “tests”. It is mainly about proving its durability and reliability as a means of preserving value.

“First, investors need trustworthy institutions to keep their cryptocurrencies safe. Second, liquidity [kryptowalut] must definitely improve to reduce price volatility “

Mohdi-uddin refers to the big price movements on bitcoin in the last 12 months. It also points to the collapse of the BTC price in March last year. Interestingly, bitcoin has behaved like most traditional investment assets. This is proof that the king of cryptocurrencies still has not matured to secure value storage.

“Bitcoin is extremely volatile – it has risen from $ 4,000 to over $ 40,000 over the past year, only to drop to $ 30,000.

Bitcoin is also correlated with the price of stocks and other risky assets more than it is with trading. During an economic crisis, investors are more likely to abandon cryptocurrencies. This is exactly what happened in March 2020. “

Bitcoin and national currencies

Mohdi-uddin doubts that cryptocurrencies have any real chance of replacing modern currencies. However, he believes that the scarcity of bitcoin serves as a strong contrast to the rapid printing of money and stimulating monetary policy.

“Governments are aware of any technology that could potentially harm national currencies.”

A weakening in the position of currencies such as the dollar and the euro would effectively affect the ability of governments to print money during economic crises.

The topic of printing money and the possible impact of bitcoin on the position of gold returns in the media from time to time. The awareness of world governments about the need to make changes in financial systems is manifested primarily in the creation of CBDC projects. Many countries, including China, the US and Russia, have prioritized these projects. Whether or not BTC becomes a global and independent world currency, the economic impact of decentralized technology will be very significant.

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