Bitcoin (BTC) poses a meaning threat to the earth'south reserve currency, the United States dollar, according to a strategist at major American investment banking company Morgan Stanley.

Ruchir Sharma, chief global strategist at Morgan Stanley Investment Management, believes that the dollar's reign is likely to cease due to global distrust in traditional finance, while Bitcoin is likely to capitalize on that lack of confidence.

In a Dec. 9 article in The Fiscal Times, Sharma provided a cursory outline on the history of the world'due south reserve currencies, noting that the dollar's run had lasted 100 years at the start of 2020. According to the strategist, other major global fiat currencies similar the euro or China'south yuan have failed to gain the globe's trust, underlining the lack of a successor for the dollar.

Sharma said that a new grade of decentralized contenders — cryptocurrencies similar Bitcoin — are likely to threaten the dollar's supremacy. Bitcoin has already established itself equally one of the hottest investments of 2020 by quadrupling in price since March amid the pandemic and the U.S. Federal Reserve's continued money printing, he noted:

"The dollar'south reign is likely to end when the residuum of the globe starts losing conviction that the U.s.a. tin can keep paying its bills. [...] Money printing is likely to keep, even when the pandemic passes. Trusted or non, Bitcoin volition gain from widening distrust in the traditional alternatives."

Sharma also pointed out that Bitcoin is outset to make "progress on its ambition to replace the dollar equally a medium of commutation." The strategist said that Bitcoin'due south adoption is steadily growing from investment to international merchandise and other use cases. "In recent weeks PayPal and its Venmo subsidiary have started storing Bitcoin with an eye towards accepting information technology every bit payment next year," he added.

The strategist warned central banks to pay more attention to their monetary policies if they desire to maintain their position of power:

"Bitcoin's surge may still prove to be a bubble, but even if it pops, this year'south rush to cryptocurrencies should serve as a alert to regime money printers everywhere, particularly in the U.S. Do non assume that your traditional currencies are the simply stores of value, or mediums of exchange, that people volition e'er trust."