Former Coinbase CTO Balaji Srinivasan has said that the US Dollar (USD) is not too big to fail and expects Bitcoin (BTC) to replace it as the global reserve currency.
Srinivasan pointed out that unlike in the past when investors were attracted to dollar-denominated assets in times of stress, these are different times. He added that historical data shows that people get out of devaluing currencies, which is where the USD tends to fall.
“Dalio has a different definition of historical reserve currencies. He says it is the US dollar, then the British pound before that, then the Dutch guilder before that. But the point is that reserve currency status persists,” Balaji couple,
He said that this is the difference between 2008 and 2023 as the USD is no longer in its strong position. Balaji also suggested that the Chinese RMB may even replace the USD as the world reserve currency.
This continues his earlier view that bitcoin could reach $1 million in 90 days as the US financial system suffers from hyperinflation. Meanwhile, many believe that Balaji’s predicted changes take generations, not 90 days.
the US dollar is weakening
While not everyone believes that BTC will replace the USD, there are clear signs that the US Dollar is weakening against other cryptocurrencies. The US Dollar Index is down 8.9% over the past 6 months and has lost 1.34% of its value over the past year.
The USDX measures the value of the USD relative to a basket of other major fiat currencies, and its decline over the past 6 months suggests that the dollar is losing value. The decline is due to fears of a recession due to an interest rate hike by the Fed and the recent collapse of major US banks.
Meanwhile, bitcoin has been going strong in recent months. According to BeInCrypto data, the cryptocurrency has gained 46.18% over the past 6 months and is up 65.54% on year-to-date metrics.
Interestingly, most of the BTC gains in recent weeks have been attributed to trading in the US. Its performance has led some to attribute higher bitcoin prices and faster adoption. But experts agree that any increase in bitcoin price is unlikely to reach the levels predicted by believers in hyperbitcoinization.
BeInCrypto has reached out to the company or individual involved in the story for an official statement regarding the recent developments, but has not yet received a response.