Close Menu
Invest Intellect
    Facebook X (Twitter) Instagram
    Invest Intellect
    Facebook X (Twitter) Instagram Pinterest
    • Home
    • Commodities
    • Cryptocurrency
    • Fintech
    • Investments
    • Precious Metal
    • Property
    • Stock Market
    Invest Intellect
    Home»Cryptocurrency»Could Bitcoin Replace the Dollar and Become the Global Reserve Currency?
    Cryptocurrency

    Could Bitcoin Replace the Dollar and Become the Global Reserve Currency?

    June 23, 20255 Mins Read


    Given the concerns over tariffs and a potential global trade war, a growing number of investors have suggested that Bitcoin (BTC -0.99%) might eventually replace the U.S. dollar and become the global reserve currency. Is this likely to happen? The answer, of course, is no.

    Does Bitcoin meet the criteria of a reserve currency?

    First of all, it’s debatable whether Bitcoin has the right characteristics to be a true reserve currency. According to the Federal Reserve, money must serve three critical functions. It must be a store of value. It must be a medium of exchange. And it must be a unit of account. Bitcoin does not yet meet all three of these essential criteria.

    Gold coin with Bitcoin symbol on it.

    Image source: Getty Images.

    While Bitcoin is a store of value, it is not yet a popular medium of exchange for making everyday transactions. When was the last time that you used Bitcoin to pay for anything?

    Moreover, Bitcoin is not yet used as a unit of account. In other words, companies don’t price their goods or services in Bitcoin. When you walk into a supermarket, for example, the goods on the shelves are priced in dollars, not Bitcoin. When you pump gas at the gas station, you see a price displayed in dollars, not Bitcoin.

    Even though Satoshi Nakamoto created Bitcoin to be a digital currency, it really trades more like a global commodity these days. People buy and hold Bitcoin, they don’t spend it. For that reason, it has become fashionable to refer to Bitcoin as digital gold. Gold, too, started off as a currency, with people making gold coins to trade for things of value.

    Impact of tariffs

    It is, however, possible to imagine a future scenario in which Bitcoin finally becomes a true medium of exchange or a unit of account. However, it is highly unlikely, to say the least. It would require a tectonic readjustment of the global financial system, such as occurred in the 1920s (when the dollar replaced the pound as the global reserve currency), or in the 1970s, when the U.S. officially moved off the gold standard.

    In 2025, discussion is building about Bitcoin replacing the dollar. The prospect of a global trade war, combined with an out-of-control U.S. debt load of $37 trillion, has some investors thinking that nations around the world will eventually turn their back on the U.S. dollar. A natural replacement might be Bitcoin, given its global appeal and its non-sovereign status.

    However, even if foreign investors decide to flee the U.S. dollar and all dollar-denominated assets, it would likely require an epic agreement among all the major trading nations of the world to replace the dollar with Bitcoin. A good example is the Bretton Woods Agreement of 1944. This is when the major trading nations of the world met in the final days of WWII to discuss a reordering of the international financial system led by the U.S.

    The problems caused by Bitcoin hoarding

    Let’s say, for the sake of argument, that the tariff situation gets out of hand, there is a major trade war, and top trading nations decide to meet in some far-flung foreign capital to discuss moving away from a dollar-based international financial system.

    Even then, it’s unlikely that they would decide on Bitcoin as the new global reserve currency. That’s due to one key factor: People, companies, and governments are hoarding their Bitcoin. They are pledging never to sell their Bitcoin, and that is leading to a situation where it is increasingly difficult to find new Bitcoin for sale. Even cryptocurrency exchanges are now complaining that they are running out of Bitcoin.

    A new report from digital asset bank Sygnum highlights the problems caused by Bitcoin hoarding. The report focuses on Strategy (MSTR 0.23%), which has become the largest corporate holder of Bitcoin in the world. It now holds close to 3% of all Bitcoin.

    The more Bitcoin that Strategy hoards for its corporate treasury, the more unlikely it is that Bitcoin can ever become the global reserve currency. According to Sygnum, once Strategy holds 5% of all Bitcoin worldwide, it will become impossible for Bitcoin to ever become a global reserve currency.

    Similarly, a new report from Gemini and Glassnode highlights that 30% of all Bitcoin in the world is now held by just 216 centralized entities. These include corporations, cryptocurrency exchanges, Wall Street banks, ETF investment firms, asset management firms, hedge funds, and sovereign wealth funds. So, a digital currency that was originally designed to be as decentralized as possible, embraced by billions of people around the world, is becoming highly centralized at a rapid pace.

    The future upside potential of Bitcoin

    The good news, if you’re a Bitcoin investor, is that it probably does not matter if Bitcoin ever becomes the global reserve currency. People will continue to buy Bitcoin, just as people continue to buy gold.

    Demand for Bitcoin continues to soar. It’s not just crypto enthusiasts who have embraced Bitcoin. It’s now corporations, Wall Street banks, and even sovereign governments. It’s hard not to be bullish on Bitcoin, even if the original vision of early crypto pioneers to replace the U.S. dollar with Bitcoin never materializes.



    Source link

    Share. Facebook Twitter Pinterest LinkedIn Tumblr Email

    Related Posts

    One in four savers would consider buying cryptocurrencies as part of their retirement planning

    Cryptocurrency

    Cryptocurrency Live News & Updates : Shiba Inu Price Faces Potential Volatility Ahead

    Cryptocurrency

    Cryptocurrency: unlocking the digital vaults

    Cryptocurrency

    What’s the best Crypto to buy in August? This new Cryptocurrency could deliver 5x ROI bypassing ETH 2x

    Cryptocurrency

    Which Cryptocurrency Is More Likely to Be a Millionaire Maker? Dogecoin vs. Solana

    Cryptocurrency

    Is a Cryptocurrency Market Crash on the Horizon?

    Cryptocurrency
    Leave A Reply Cancel Reply

    Top Picks

    Henrik Zeberg: $10,000 Gold? ‘A Lot More Than That’ in Aftermath

    Property

    Eklo s’implante à Paris 17e, Porte de Saint-Ouen 

    Investments

    Buying Property in Cebu: The Ultimate Guide

    Editors Picks

    State announces $332K in Grow Ohio Grants to support agricultural education opportunities

    August 11, 2024

    Boom!: Data Center Wave May Overtake Utility Power Capacity Soon

    October 26, 2024

    RYT Launches Blockchain Platform to Power Real-World Solutions: Digital ID, National Currencies, and Beyond

    February 20, 2025

    With markets moving so fast, how can I make sure my investments keep up?

    April 29, 2025
    What's Hot

    5 Low-Volatility Dividend Stocks Yielding Up To 11.1%

    May 3, 2025

    Programmation de l’énergie 2025-2035 Proposition de loi Gremillet

    June 20, 2025

    ORG Partners LLC Takes $39,000 Position in iShares Silver Trust (NYSEARCA:SLV)

    August 17, 2024
    Our Picks

    China July Copper imports jump on strong domestic demand – ING

    August 8, 2025

    Robbie MacDonald named IQUW Head of Property

    July 23, 2024

    Two bio-breeding labs launched to boost BRI agricultural cooperation

    June 27, 2025
    Weekly Top

    Prudently managing post-retirement portfolio need of the hour

    August 24, 2025

    Zimbabwe’s premier agricultural show kicks off with over 500 exhibitors

    August 24, 2025

    China says ‘rampant’ US protectionism threatens agricultural ties

    August 24, 2025
    Editor's Pick

    Olympic gold medals are worth more than ever after cost of metals surged

    August 11, 2024

    Is A 5% Bitcoin Allocation Wise For Retirement Portfolios?

    August 14, 2025

    Mortgage Advice Bureau reports 67% of borrowers who’ve purchased a property in the last twelve months were FTBs

    May 30, 2025
    © 2025 Invest Intellect
    • Contact us
    • Privacy Policy
    • Terms and Conditions

    Type above and press Enter to search. Press Esc to cancel.