Notable Bitcoin Bear Flips Bullish, Expects BTC to Go Parabolic in Near-Future

Deutsche Bank lead strategist Jim Reid believes the reign of fiat money could soon end and cryptocurrencies like bitcoin could take over the global financial market.

In a recently released research paper, Reid delve extensively into the unstable fiat currency system and firmly stated that the fiat currency system will highly likely come to an end in the upcoming years.

Reid stated:

“Central banks and governments which have ‘dined out’ on the 35 year secular, structural decline in inflation are not able to prevent it rising as raising interest rates to suitable levels would risk serious economic contraction given the huge debt burden economies face. As such they are forced to prioritise low interest rates and nominal growth over inflation control which could herald in the beginning of the end of the global fiat currency system that begun with the abandonment of Bretton Woods back in 1971.”

Will bitcoin Evolve Into a Competitor Against Fiat Currency

In his paper, Reid essentially criticized the centralized nature of fiat currencies and the ability of governments, authorities, and central banks to manipulate virtually aspect of paper money, including inflation rates. Due to the existence of centralized authorities within the fiat currency system, Reid emphasized that it is vulnerable once it loses its leverage over the global economy, likely triggered by the emergence of decentralized currencies like bitcoin.

“It’s possible that inflation becomes more and more uncontrollable and the era of fiat currencies looks vulnerable as people lose faith in paper money,” added Reid.

He further noted that cryptocurrencies like bitcoin, despite the growing interest from the traditional financial industry in blockchain technology, have the potential to take over fiat currencies and operate as the global monetary system, given their open structure and decentralized systems.

As security and bitcoin expert Andreas Antonopoulos previously explained, bitcoin has an advantage over fiat currencies because it is voluntary. It does not enforce any regulations and policies through violence, and it does not require a certain group of individuals and businesses to use the digital currency for leverage. Anyone can choose to use bitcoin as a currency, a store of value, and a safe haven asset at their will and demand.

For this reason, Reid stated that there exists a possibility of cryptocurrencies eventually competing against national currencies and the fiat currency system.

“Although the current speculative interest in cryptocurrencies is more to do with blockchain technology than a loss of faith in paper money, at some point there will likely be some median of exchange that becomes more universal and a competitor of paper money,” Reid noted.

Long-Term Growth of Bitcon as a Global Currency

The long-term price targets of prominent financial analysts like Max Keiser at $100,000 assume that bitcoin will evolve into a major global currency and penetrate the market of gold. If bitcoin can compete with fiat currencies in the upcoming years, the market valuation of bitcoin would likely be able to reach a few trillion dollars, which is an optimistic long-term indicator for bitcoin investors.

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