Bitcoin Cannot Replace Fiat But Could Replace Gold as SoV: Bank of Singapore Chief Economist

Bitcoin Cannot Replace Fiat But Could Replace Gold as SoV: Bank of Singapore Chief Economist

Since its inception in 2009, people have wondered if Bitcoin (BTC) could become a standard electronic peer-to-peer cash system, as intended by Satoshi Nakamoto. However, some have asserted that the cryptocurrency’s erratic volatility will make this ambition impossible.

That said, a recent report shows that the Bank of Singapore shares this belief as well. The Chief Economist of the bank, Mansoor Mohi-uddin cited Bitcoin’s rally from the $4,000 yearly low last year to a new all-time high above $40,000 a few weeks ago, as an illustration of the benchmark cryptocurrency’s signature volatility dismissing the narrative that Bitcoin could replace fiat currencies.

Nonetheless, Bitcoin and other altcoins have a potential role as a digital store of value if they can get some issues under control. Some of these issues involve the aforementioned volatility, high liquidity, and safer custodians.

The Chief economist explained that “first, investors need trustworthy institutions to be able to hold digital currencies securely. Second, liquidity needs to improve significantly to reduce volatility to manageable levels.”

Furthermore, the cryptocurrency space requires additional regulations from global authorities, to tackle the alleged use of cryptos in criminal activities. However, Mohi-uddin warned that governments could “fight back” against cryptocurrencies if they feel threatened by their existence, which explains the growing trend of central bank-issued digital currencies.

The Chief economist also noted that the growing interest from institutional investors bolsters the narrative that Bitcoin could become a better store of value and might replace gold.

BTCUSD – Hourly Chart

Key BTC Levels to Watch — January 25

Bitcoin regained a bullish momentum during the early trading session on Monday, recording a $2,000 bounce from $33,000 to $35,000. However, the cryptocurrency has lost that momentum—in the meantime—and has erased almost all recorded gains today.

Nonetheless, this could be just a minor retrace before another leg up, as Bitcoin’s broader price action suggests that the price is likely to get back above the $36,000 mark soon.

Meanwhile, our key resistance levels are at $34,100, $35,000, and $36,000. While our key support levels are at $33,000, $32,000 and $31,000.

Total Market Capitalization: $966 billion

Bitcoin Market Capitalization: $611 billion

Bitcoin Dominance: 63.2%

Note: Learn2.Trade is not a financial advisor. Do your research before investing your funds in any financial asset or presented product or event. We are not responsible for your investing results.

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Author : Azeez Mustapha

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Azeez Mustapha is an experienced author, trader, markets analyst, signals strategist, and funds-manager.