Steve Forbes, the publisher of Forbes Media, has attacked the fixed supply of Bitcoin. Specifically, indicating that this characteristic actually holds back the ability to meet the needs of a growing economy.
He also argues that Bitcoin cannot replace the dollar because it is currently too volatile to function as money.
Emphasizing: «Bitcoin is booming. But, it still won’t replace the dollar.
Steve Forbes indicates that: “Money only works better if it has a stable value.”
Steve Forbes and Bitcoin
According to Steve Forbes, cryptocurrencies can only challenge existing money, if their value is linked to that of gold or the Swiss franc.
In arguing his case against the idea that Bitcoin will eventually replace the dollar, Forbes admitted that crypto is now considered a respectable investment class.
Adding that: “Financial institutions are adding it to their Wallets.”
“People are piling up due to lack of faith in government fiat currencies. The Federal Reserve and other central banks have crushed interest rates. And, they are printing unimaginable amounts of money to pay for COVID relief measures and stimulate the economy.
According to Steve Forbes, some of these steps could be the possible reasons why Bitcoin has become an investor favorite.
Could cryptocurrencies replace the dollar?
In a segment of the “What’s Ahead” podcast, Steve Forbes warns that Bitcoin and other cryptocurrencies are not yet substitutes for the dollar.
Furthermore, he also acknowledges that some enthusiasts see Bitcoin as “the new gold.” While others believe that “it will eventually replace the dollar.”
However, he believes that this is not going to happen due to how the volatility of Bitcoin can affect the contract system.
Steve Forbes, expressed that Bitcoin is too volatile to use as money. For example, imagine if you had obtained a mortgage worth $ 250,000 in Bitcoin last March. Today you would owe the bank $ 2 million.
As a curious fact, Forbes assumes that no one in “their right mind would sign a long-term contract based on Bitcoin.”
Similarly, Forbes emphasized that: “Another problem with Bitcoin is that it has a fixed supply. The amount cannot be increased. Rather, the money supply must expand to meet the growing needs of a growing economy. ‘
In closing, Steve Forbes stated: “For cryptocurrencies to seriously challenge the dollar, they must have a fixed value. Preferably linked to gold or the Swiss franc, and its supply must be able to grow as economies grow.
I say goodbye with this phrase from Benjamin Franklin: «Take care of small expenses. A small hole sinks a ship.