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Bitcoin’s market cap target of $2T crucial to central banks buying it

Rakshitha Narasimhan

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Source: Pixabay

No matter how many altcoins enter the market, Bitcoin is likely to maintain its title of ‘king coin.’ In fact, even after the crypto-market crash in March, many defended Bitcoin’s position as a top cryptocurrency. Dan Held, crypto-exchange Kraken‘s Head of Business Development, is the latest to comment on this.

According to Held, Bitcoin is the final evolution of money, with the Kraken exec calling it the ‘apex predator’ of money. Going on to compare Bitcoin with gold and fiat, Held asserted that BTC was built to overthrow governments’ control over money, despite the fact that the latest market crash contributed to many people questioning the cryptocurrency’s narratives.

Recalling gold‘s behavior during the 2008 crash, Dan Held is of the opinion that Bitcoin’s ‘digital gold‘ narrative is only getting stronger day by day. Further asserting that Bitcoin is continuing Gold’s mission, but into the digital age, he added,

“I think digital gold is a good way to represent Bitcoin. It represents the ethos of why it was created and also the value that it brings to the world.”

Gold, while scarce and valuable, cannot be carried or divided easily; it’s of no use in terms of simple payments. P2P cash [Bitcoin], on the other hand, can be transacted between two people without the need for an intermediary, which is why, perhaps, referring to BTC as digital gold is indeed justified.

Ethereum co-founder Vitalik Buterin, on the other hand, does not agree with Bitcoin being called the digital gold. In a recent tweet, he responded to a Bitcoin developer who claimed that Bitcoin was, is, and always shall be ‘digital gold,’ stating that Bitcoin was originally designed to be P2P cash, not digital gold.

With so many people defending Bitcoin, an important question arises – ‘Is the idea of BTC in itself against the idea of BTC maximalism?’ Held, however, opined that this isn’t the case as all Bitcoiners have tried other altcoins and then settled with BTC as it is the most reliable coin. He added,

“A lot of Bitcoin maximalists actually began with other cryptocurrencies he more you experiment with other alls, the more you realize BTC it is. I certainly feel that being a Bitcoin maximalist isn’t just about choosing one thing and sticking with it. It’s seeing and comparing.”

Does that mean central banks will intentionally buy Bitcoin in the future? Will they ever add Bitcoin as a strategic asset in their reserves? Will people be able to spend money to buy Bitcoin just in the same way that they buy gold now? These are some of the questions that come up when Bitcoin is portrayed as the perfect form of currency.

Held, however, argued that Bitcoin had to surpass the 2 trillion market cap for central banks to consider buying them. He said,

“Central banks need a lot of liquidity to get in and out of a position like that. The depth of the gold markets is massive. Bitcoin similarly needs to be that liquid to allow giant institutions like sovereign wealth funds and central banks and, big hedge funds do to take in a billion or two in and out.”

At the time of press, however, the world’s largest cryptocurrency had a market cap of only $122.9 billion, with the coin trading at $6,833.

Source: Coinstats

A Psychology and Journalism graduate, Rakshitha focuses on UK and Indian markets. As a crypto-journalist, her interests lie in blockchain technology adoption across emerging economies.