The financial industry is currently seeking to integrate the new financial technology with the traditional financial tech. Bitcoin is among the cryptocurrencies that serve as a digital asset globally. Speculators believe that a bull market trend for BTC will necessitate a universally neutral reserve asset.
Rona Foroohar, an associate editor and columnist at Financial Times, recently published an opinion article on the “gold bugs,” which attracted comments from central bankers and investors. Foroohar wrote that for investors to hoard physical bars in the new digital financial world, they have to strongly believe that that the sky is falling.
The columnist attributes the “gold bug” to the urgencies welcomed by mild geopolitical fears, and the post-2008 horizon, which she believes was systematically fragile.
The Dutch Central Bank issues a warning in October that if the system fails or witnesses a monetary reset, gold would be the go-to solution to rebuild the system. There is a sense of security in gold due to the stability of the DCB’s balance, which gold bolsters have high confidence in.
According to Ray Dalio, speaking at a conference at the Institute for International Finance, there is a likelihood that gold would save the situation if America’s creditors betrayed the signs of edginess.
Jamie Dimon, the Chief at JPMorgan, and Stanley Druckenmiller, fund manager, had warned back in 2016 that there was an unsustainable financial situation due to unfunded healthcare and pension entitlements in the U.S.
The U.S Dollar is at the risk of depreciating due to fiscal imbalances, which have led to inflated balance sheets and low-interest rates. Such a situation would scare off investors from holding the USD nor federal debts.
She points out that there is a need to develop an asset that is no one’s liability. These words from Foroohar meant gold or any other independent asset.
Recently, China edged away from petrodollar when it Issued its pioneer Eurobond in fifteen years. Eurasia is gradually de-dollarizing, and this is so critical that it would force the U.S to sell USD in an effort to settle the balance of payments in the country.
However, the co-founder of Gemini cryptocurrency exchange, Cameron Winklevoss, has an opinion contrary to Dalio’s. Winklevoss believes that Bitcoin holds a solution that is not confined to being a “digital gold” or a safe-haven digital asset. Winklevoss had also forecast that Bitcoin will break gold’s market cap of $7 trillion.
This article is Originally posted on CoinCentral.com
Author: Denis Miriti