The American venture capital investor Tim Draper predicted that bitcoin’s price will surge in the future due to the cryptocurrency’s advantages over fiat currency.
The billionaire claimed in 2020 that the COVID-19 pandemic will have a disastrous consequence on the global economy, but it will be a flourishing factor for BTC. The primary digital asset climbed to an all-time high of almost $70,000 the following year, whereas a financial crisis and record inflation rates shuttered many regions across the globe.
Here’s Why BTC is Better
One of the biggest proponents of bitcoin – Tim Draper – doubled down on his support for the asset in a recent interview for Fox Business.
He believes it will “rise above fiat” due to its advantages over the dollar and other currencies. One flaw that national currencies have is that they are controlled by a bank or a government, while BTC’s network is secured by “hundreds of thousands of nodes,” he added:
“Having to have a bank and a government that decides on what currency is good is not as effective as having a bitcoin where you have a trusted third party which is hundreds of thousands of nodes out there checking to make sure that the transaction was done properly.”
It is worth mentioning that central banks can also affect the supply of fiat currency by printing colossal amounts.
The Federal Reserve, for example, printed trillions of dollars in 2020 and 2021 to tackle the consequences of the coronavirus outbreak. While this move was somewhat helpful in the beginning, it later became one of the reasons for the record inflation rate in the USA.
Meanwhile, bitcoin has a fixed maximum supply of 21 million coins ever to exist. Many supporters think this gives the asset an upper hand against inflation rates. In addition, its decentralized nature (the fact that no banking institution or a government can control it) could make it more attractive to people than fiat, whose supply is constantly adjusted by centralized authorities.
“So I think it’s just better, safer technology, and eventually, the rest of the world will come onboard,” Draper concluded.
Failure With the Previous Forecast
The American billionaire has not always been spot on in his predictions regarding bitcoin’s future valuation. He forecasted in 2021 that BTC would climb to $250,000 by the end of last year, while in 2020, he suggested the asset would reach that milestone at the beginning of 2023. Despite the significant price increase in the past three years, bitcoin came nowhere near the $250K target.
Draper said in a recent tweet that “we have to wait a little longer (maybe 2 years)” before BTC skyrockets to that level.