Bitcoin’s (BTC) limited supply has often been considered one of its greatest strengths as the scarcity pushes the price higher, but a financial expert believes it could undermine its usefulness in the long run
The American publishing executive, Steve Forbes, believes that Bitcoin’s scarcity could work against it in the future and limits its usefulness. Forbes made this known in a YouTube video where he discussed Bitcoin and Gold.
Forbes told his viewers that he doesn’t think Bitcoin is the new gold yet. He added that BTC remains too volatile to be considered as an important asset and the 21 million supply hinders the adoption of the cryptocurrency.
The financial expert is pessimistic about Bitcoin as he pointed out that gold has been the monetary standard for over 4,000 years. Forbes didn’t discredit Bitcoin altogether but believes that Bitcoin doesn’t have what it takes to displace gold at the moment.
Steve Forbes mentioned Bitcoin’s stellar performance this year and explained why the cryptocurrency is doing so well. The biggest booster for the surge in Bitcoin price is people’s fear that the United States Federal Reserve and other central banks worldwide are printing too much money. Despite the massive price increase, Forbes noted that Bitcoin’s price fluctuations are too crazy, and the cryptocurrency would only work best when it has a stable value.
He further pointed out that if Bitcoin is to gain the adoption that some of the leading commodities like gold are enjoying, then the price fluctuation should be minimal. Unless that happens, Forbes believes that gold will continue to be the best hedge against inflation.
Limited supply could affect Bitcoin’s usefulness
Forbes discussed the 21 million supply of Bitcoin. The publisher stated that the arbitrary supply limit would severely hinder Bitcoin’s future usefulness. He noted that gold is scarce, but not rare.
He stated that “In contrast to Bitcoin, the issuance of gold increased about 2% a year”. This makes gold a scarce commodity but not too rare. As such, gold remains a valuable commodity that is useful in the global market.
Forbes’s point echoed what Tom Jessop, head of Fidelity Digital Assets, said last week. Jessop said they still use the word’ potential store of value’ when describing Bitcoin as the cryptocurrency remains exceptionally volatile. If Bitcoin continues in its current state, it would be tough for the cryptocurrency to become an actual store of value.