The Bitcoin vs Dollar debate is a favorite topic among financial analysts, cryptocurrency enthusiasts, and investors in general. As Bitcoin continues its erratic price action, even briefly reaching above 70,000. dollars in March 2024, the question remains as relevant as ever. So is Bitcoin a better store of value and hedge against inflation?
If you ask experts, many will agree that Bitcoin is much better than the US dollar and other fiat currencies. According to Anthony Pompliano of Professional Capital Management: Bitcoin is better because fiat currencies are more volatile and simplifies many investment rules.
Pompliano pushes for Bitcoin
In an interview with Fox News, Pompliano shared his thoughts on the ongoing case Bitcoin-Dollar Debate. He said Bitcoin is in a better position because fiat currencies are more volatile and society faces withering purchasing power.
Pompliano believes that Wall Street and the rest of conventional finance have failed to see the value of Bitcoin. At the heart of Bitcoin’s advantage is a classic economic problem of scarcity – there are only 21 million Bitcoins available, a meager resource compared to the fiat currencies that central banks can continue to print and issue.
Pompliano’s interview and ongoing debates come amid growing institutional interest in Bitcoin. After the approval of spot BTC ETF funds by the US Securities and Exchange Commission (SEC) on January 10, 2024, there has been a growing interest and inflow of funds into these funds. Months after the first 11 funds were approved, interest in Bitcoin ETFs continues, helping to push up the price of the cryptocurrency.
Bitcoin vs. USD: Anthony Pompliano explains why BTC is better than Fiat currencieshttps://t.co/1sG1aad8OX
— John Morgan (@johnmorganFL) October 20, 2024
Bitcoin: a elementary but occasional commodity
According to Pomplian, The attractiveness of Bitcoin and the value lies in the simplicity of the investing principles. Since the supply of Bitcoin is narrow, this may affect its future market value. According to Pompliano, the problem for many traders and investors is that they are too focused on sophisticated financial products such as leverage and trading.
The problem with these sophisticated but popular instruments is that you have to track prices and trade at the right time. However, with Bitcoin, users simply need to buy and hold. In brief, Bitcoin offers long-term growth in value and a better hedge against inflation.
Deutsche Bank analyst sees BTC as ‘digital gold’
Bitcoin enjoys robust support from financial analysts. According to Marion Laboure, an analyst at Deutsche Bank Research, it can potentially become our “gold of the 21st century”. Laboure says Bitcoin and cryptocurrencies’ market capitalization of over $1 trillion is too vast to ignore.
Laboure adds that Bitcoin will soon gain popularity as a viable payment alternative, while the share of fiat currencies in transactions will decline. He adds that Bitcoin is “digital gold” and ether, the second most popular coin, could be our next “digital silver.”
Featured image from Pexels, chart from TradingView
