When the first crypto (Bitcoin) appeared back in 2009, nobody could even think of such issues as the FIAT vs Crypto battle. Nowadays, cryptos are on the rise. The best proof of this event is the recent statistics. Just have a look at these facts collected by Zippia.com.
- People use more than 200,000 cryptos worldwide now.
- The most popular cryptocurrencies are BTC, ETH, and USDT.
- USDT is the biggest stable coin at the moment. It’s possible to exchange usdt erc20 trc20 at the rate of approximately 1:1 to USD. According to predictions published on Binance.com, the price of USDT can go up to 1.40 USD by 2030 and up to 2.29 USD by 2040.
- There are more than 200,000 transactions related to BTC every single day.
- The value of the global blockchain market will exceed 67 billion USD by 2026.
- There are more than 84 million crypto wallets around the globe at the moment.
It’s clear that cryptos are here for the long run. They won’t disappear any time soon. Now, the question arises.
Will Cryptocurrencies Replace FIAT in the Future?
This is a hot topic right now on the web. Many experts say that cryptos will become even more popular in the future. Of course. It’s pretty reasonable. They offer people many benefits, like a faster speed of transactions, a higher level of privacy, and low transaction fees.
However, they are not likely to completely replace FIAT, at least in the near future. Why? That’s because of their highly volatile nature.
Here’s an example of El Salvador, which can be really helpful to illustrate this point. In September 2021, this country decided to make Bitcoin a legal tender. It was a big surprise for many people. In June 2023, El Salvador suffered a loss of approximately $38.1 million due to this experiment with BTC. Thus, this adoption of Bitcoin has its own drawbacks. It causes a lot of debate among experts.
FIAT vs Crypto
Many governments used to print money to fight crises. The last vivid example of this was the Covid crisis. Most central banks worldwide added more money to the financial system as a solution.
Of course, it caused the global inflation. That’s the weak point of FIAT currencies. This definitely makes more people think of cryptocurrencies as a way to diversify their funds to avoid the negative consequences of inflation. Stablecoins can be a good cushion to use for people during inflation.
However, some financial experts predict that FIAT currencies will become stronger shortly. That’s because there is a shift happening right now in the financial system.
For example, The US Federal Reserve has decided to switch from quantitative easing to quantitative tightening. In simple words, less FIAT money will be available in the future in the circulation. And it will make FIAT money more valuable.
Sudin Baraokar, a crypto expert, says that fiat currencies are gaining trust now. Thus, there might be a spike in the number of exchanges from usdt to eur and other fiat currencies.
Should You Even Compare Fiat and Crypto?
Some experts think comparing crypto and fiat is wrong because they have different purposes. According to Oriol Caudevilla, a financial advisor, cryptos can’t replace fiat currencies. The reason is they are aimed to be more like assets than actual money.
It’s not correct to associate the rise of DeFi with the fall of fiat. They are 2 completely different things. The expert continues with the statement that it would be better to regulate cryptos to make them more safe investment assets for everyone. Of course, this is only an opinion. So, we would recommend treating it with a grain of salt.
