Do fiat currencies need to fail for crypto to truly take off?

For many crypto experts hoping for monetary collapse and a digital coin-powered revolution, bitcoin (BTC) dominance seems impossible without a massive public loss of faith in conventional money, and a seismic crash that kills off cash once and for all. Many are now hoping that “money printer goes BRRR”-type hyperinflation – possibly accelerated by the coronavirus pandemic’s economic fallout – will bring about a swift rise to the top for BTC. But a prominent analyst has claimed that this may not be the case after all – and a cash hyperinflation crisis may not be a necessary prerequisite for BTC mainstream acceptance. The claim was made by Saifedean Ammous, former Professor of Economics at the Lebanese American University, and the author of the 2018 book The Bitcoin Standard. In a video interview with CoinScrum,

Ammous stated,

“Hyperinflation isn't necessarily related to bitcoin rising. I think bitcoin can rise without there being hyperinflation.”

Conversely, he opined, “you can get hyperinflation that is completely unrelated to [bitcoin popularity].” Instead, Ammous stated that BTC's popularity would instead accelerate if the token “continues to rise in value and continues to increase” the “volume daily of BTC transactions conducted internationally.” Should that prove to be the case, bitcoin would “increase in importance” regardless of the fate of fiat currencies. However, Ammous did concede that should hyperinflation take place, many people would likely look to buy bitcoin in an effort to “get their money out of the country.” Regardless, a more natural path to BTC domination does not involve a sudden fiat apocalypse, he claims.

He stated,

“A slow growth in national currencies’ market capitalization with faster growth in bitcoin and eventually see bitcoin overtake fiat. That is independent of fiats going through hyperinflation.”

He also appeared relatively dismissive of central bank digital currencies (CBDCs) and their chances of disrupting the global economic scene. The author stated that CBDCs were “essentially vaporware,” as most fiats were already digital currencies already in all but name.

He claimed,

“There’s no functional ability that's added on [when CBDCs roll out]. Perhaps it might be that the app on your phone is going to be connected directly to the Federal Reserve, bypassing your local bank. The Federal Reserve so getting rid of your local bank from the equation isn’t that big of a deal [for end-users].”

Article Produced By
Tim Alper

Tim Alper is a British, South Korea-based journalist, a regular contributor to Cryptonews.com, who covers cryptocurrency and blockchain related news daily, writes in depth analysis pieces about the latest trends in the cryptocurrency and blockchain space. Tim has over 12 years of media experience. He has written for the BBC, the Guardian, the Jewish Chronicle, Chosun Ilbo and many other media outlets, covered cryptocurrency and blockchain related news. He has also collaborated on media projects with the likes of Samsung, Sony, LG, Hyundai, Korean Air, TÜV SÜD and Shell.

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