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Bitcoin will not replace the dollar as a reserve currency, according to investor Michael Burry

Key facts:

Burry is famous for having foreseen the financial crisis of 2008.

For Burry, governments will be violent against a decentralized currency like bitcoin.

Michael Burry, recognized for having predicted the great financial crisis of 2008, does not see possible that bitcoin will end up replacing the dollar as an international reserve currency. This, despite the fact that it does see the dollar in imminent danger of losing that role.

Through his Twitter account, Burry referred to the “Triffin’s Dilemma”, which posits the danger of a lack of confidence in the international reserve currency. Although it dates back to the 1960s, the “Triffin’s Dilemma” remains valid in the face of dollar overprints and the increasingly popular view that the dollar is losing strength as an international reserve.

This concept arose from the remarks of the economist Robert Triffin, who pointed out the need for the country whose currency served as a reserve should guarantee sufficient liquidity to stimulate the world economy, without losing the ability to represent reserves with respect to gold.

For Burry, bitcoin “does not solve Triffin’s dilemma, since a global fiat economy is relative and requires liquidity on the scale of the largest economies in the world.” And just as a small economy cannot fulfill that role, in his opinion, neither can bitcoin.

“The heart of the fiat system goes to the next champion of GDP (gross domestic product),” argued the investor in the social network. And in that scenario, it sees China as the clearest candidate, even though its current policies would not favor this scenario.

Over the next decade, China’s policies will adapt as it becomes the GDP champion. China’s highly efficient and tightly run economy will adjust to its new reality, to its advantage.

Michael Burry, an investor known for predicting the 2008 crisis.

Bitcoin positions itself in the global discussion

Burry’s vision is not very popular as of late, as more institutions, analysts and investment firms see bitcoin as a clear rival to the dollar and even gold, which has lost its reign as a reserve, to bitcoin.

On the dollar, personalities like BlackRock CEO Larry Fink take a very different stance than Burry. The director of the firm that manages almost 7 trillion dollars in assets has considered in the past that bitcoin is a potential threat to the hegemony of the dollar, as reported by CriptoNoticias.

Meanwhile, dozens of companies and investment firms have turned to invest billions of dollars in cryptocurrency, with emblematic cases such as MicroStrategy or Tesla.

Bitcoin at risk from government ‘violence’

In keeping with your vision, Burry believes bitcoin has a “fragile” future in the face of government actions and its monopoly interests in relation to money. That is, bitcoin is in danger from the resistance that institutions will put to a decentralized and global money.

In recent days, the investor – whose identity came to the cinema in the movie The Big Short (2015) – has repeatedly referred to bitcoin. Through his Twitter account, Burry weighed this Sunday that he “does not hate” bitcoin.

However, in my opinion, the long-term future is fragile for a decentralized cryptocurrency in a world of legally violent and ruthless centralized governments with interests in currency monopolies.

Michael Burry, an investor known for predicting the 2008 crisis.

In his view, anything can happen in the short term. He also stated that he is not a bassist. That is, your vision is long-term and does not consider that there will be a significant drop at the moment for the first cryptocurrency on the market that this Monday, February 22, it corrected after setting its new maximum over 58,000 dollars.