By some estimates the path toward mainstream, worldwide usage of bitcoin has been a slow one. Two years after bitcoin first gained global momentum, it has yet to overtake any fiat currencies in terms of usage. For supporters of cryptocurrencies this may come as a surprise. However, in all likelihood, if bitcoin is to ever take a dominant position over fiat currencies, it could happen much more gradually. Now, a report by Crypto Daily suggests that bitcoin is outperforming fiat currencies at record rates. Could this be a turning point in bitcoin’s ascent?
Venezuela, Sudan, Argentina
According to a recent report by Pension Partners, bitcoin has outperformed several fiat currencies so far in 2018. While bitcoin dipped by 46.7% (“excluding bitcoin’s significant percentage gains throughout 2017”), it is nonetheless more stable over the course of the year than the Venezuelan Bolivar, the Sudanese Pound, and the Argentine Peso. These three fiat currencies fell by 99.99%, 61.61%, and 50.5%, respectively. The report indicates that, although “one may argue that these economies are not the greatest in the world to draw a comparison with, given the “nascency at which cryptocurrencies and the population that these countries have, bitcoin’s adoption [there] would definitely be impactful.”
Does Better Performance Suggest a Shift?
The argument wrapped up in the report states that if bitcoin or any other digital currency performs better than a currency backed by a central bank or government, the decentralized token likely provides better prospects for the future.
This argument is especially compelling when viewing the data for these particular currencies over this specific period of time. However, skeptics are likely to point out that bitcoin remains incredibly volatile, even in spite of its growing popularity around the world. At a future point in time, fiat currencies in countries that are currently unstable may regain some of their stability; there’s a lack of evidence to suggest that bitcoin will necessarily become more stable over time. A look at other digital currencies which have performed exceptionally poorly confirms the volatility in this space. Bitcoin gold, a highly-anticipated token when it was released, has fallen by more than 90% so far this year, for instance.
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