Bitcoin's strongest comparison, amazingly, isn't another crypto or even fiat currency, but the most precious metal on earth cherished as a treasure for centuries. Yep, I'm talking about Gold. The symbol of wealth accepted by every country on the planet. The fact that BTC is being compared to it is what makes it a big deal. Recently Jerome Powell, the chair of the U.S. Federal Reserve, acknowledged Bitcoin as a "digital gold". To me, this statement meant that Bitcoin is not here to replace the dollar, but to have a unique place in the financial system of every economy. That is also a change from his previous skeptical stance about it, so things are looking positive now.
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The Impact it has on people's perceptions:
Bitcoin has always, until last year November, been dismissed as too volatile and too speculative an asset to take seriously, so calling it digital gold now changes their entire narrative to suggest that BTC is now an asset people can hold for stability as gold already is. That statement lets bitcoin assume the qualities gold has. Plus, if the head of Federal Reserve sees it that way, then it shows that BTC is really solidifying its role in traditional finance.
But this doesn't also mean that bitcoin will suddenly become mainstream overnight, but it just shows that there is some growing institutional acceptance, and we see it all over the news.
I like the fact that Powell was careful to note that bitcoin doesn't compete with the U.S. dollar, because logically Bitcoin isn't used in everyday transactions the way fiat is. Just as Gold isn't used to buy groceries, so is bitcoin. The key words here are "Store of Value". I sincerely doubt there will come a time we will be spending Gold to buy stuff, so we will not spend bitcoin to buy stuff. If we will go full crypto for purchases, then it will definitely be the stablecoins that would be used for that.
Gold, and in this case Bitcoin's value, lies in its scarcity, decentralization and the trust that people place in it. The problem with fiat (inflation and bad monetary policies) makes more investors look at bitcoin the same way they look at gold, and that's a hedge against uncertainty. Yet the word uncertainty is something a crypto is known for, so there is a bit of a dilemma here, but since many people believe in its value, I'm sure it may stabilize at some point and be less volatile.
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But anyway, I don't think this is the final shift in attitude of the masses towards bitcoin being a digital gold. If anything, I see a slow process just like gold took some time to be recognized as a store of value; yeah, bitcoin is currently in that phase. What really matters here is that the perceptions of people are gradually being changed, and I think that in the long run, that is what will make the difference when it comes to bitcoin being accepted as a true "digital gold".
