Morgan Stanley’s chief global strategist says, “Regardless of where the price of Bitcoin goes next, cryptocurrencies remain a serious asset class.” He added that Bitcoin is making progress in replacing the dollar as a medium of exchange.
Morgan Stanley Bullish on Bitcoin and Cryptocurrencies
Morgan Stanley’s emerging markets boss and chief strategist in the world, Ruchir Sharma, posted a report on the Morgan Stanley website last week entitled “Why Crypto Is Getting Out of the Shadows”.
“Despite the natural turmoil in a global pandemic, cryptocurrencies are rapidly gaining popular support as alternatives to gold (a store of value) and the dollar (as a means of payment),” he began. The strategist explained:
We see fundamental reasons to believe that regardless of where Bitcoin price goes next, cryptocurrencies will remain a serious asset class.
Sharma stated that one reason is “the growing distrust of fiat currencies thanks to massive monetary pressure from central banks”. Another reason is “Generations” as young people see cryptocurrency as an improvement over metal coins. He continued, “The worst blow to cryptocurrency as a store of value is its volatility, but the unwavering demand from millennials helped reduce the volatility of Bitcoin even during the pandemic.”
The strategist added that this age group believes that “the open source software behind Bitcoin is more transparent, transferable and trustworthy than government-printed paper money”. He stressed that “this crypto-trust can go even deeper in emerging economies, where distrust of centralized authorities is high.” Sharma said:
Governments have been slow to recognize this trend … Bitcoin is also making strides in its ambitions to replace the dollar as a medium of exchange.
When the pandemic hit, the dollar was the world’s preferred reserve currency. “Under the leadership of the Fed, every major central bank has been printing insane money to keep the economy alive during the pandemic, undermining confidence in all national currencies,” he said, adding that 20% of all dollars in circulation are in the The year 2020 were printed and this bout has enormously increased the attractiveness of Bitcoin. “
The Morgan Stanley strategist stated:
Virtually all bitcoins these days are held as investments, not bills, but that’s changing.
“Over the past year, popular payment platforms began accepting Bitcoin and other digital currencies. This is an important step in their campaign to challenge the dollar,” he concluded.
Last week it was also announced that Elon Musk’s Tesla will accept Bitcoin as a means of payment for its products in the near future. In addition, Paypal and Mastercard are working to ensure that merchants can accept cryptocurrencies in their networks.
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