Bitcoin may have celebrated its tenth anniversary earlier this year. However, it is almost matching half the lifespan of the typical fiat currency. The only difference is that it has increased much more in value compared to its fiat counterparts.
The Lifespan of Regular Fiat
Willy Woo, a Bitcoin commentator noted on October 18 that the biggest crypto has been around 40% as long as the average government-issued currencies. He was referencing a 2018 study by DollarDaze. According to that study, researchers concluded the average lifespan is 27 years after reviewing 775 past and present fiat currencies.
The longest-living fiat currency is the British sterling pound. But, it has lost almost all its value since its inception after it left the gold standard in 1931. Woo summarized:
“Bitcoin has already reached 40% of the life expectancy of the average fiat currency (27yrs). The most successful fiat currency has lost 99.5% of its value.”
These figures sharply contrast with the ongoing declarations from the critics that Bitcoin is weakening or will eventually collapse. A record 377 Bitcoin obituaries have surfaced since records began as documented by monitoring resource 99 Bitcoins. Nonetheless, the flagship crypto has only gained value supported by its publicly-verifiable scarcity that sustains its demand.
According to previous reports, Bitcoin’s uniquely high stock-to-flow ratio ensures that its appeal is in line with gold. Thus, many proponents refer to the cryptocurrency as digital gold. The token does not encounter the challenges and pitfalls that affect fiat currencies whose supply is manipulated by centralized entities including central banks.
In the meantime, the network is expected to set a new milestone this week. It will mine its 18 millionth Bitcoin out of the total potential supply of 21 million.
IMF Outlook Points to a Looming Recession
Willy Woo’s remarks come the same week when the International Monetary Fund (IMF) issued a detailed warning about the status of the global financial system. According to the latest World Economic Outlook of October 2019, the world is in a worse position than it was before the 2008 financial crisis came about.
The IMF’s document foreword warned:
“With central banks having to spend limited ammunition to offset policy mistakes, they may have little left when the economy is in a tougher spot.”
With the global economy at crossroads, bitcoin proponents believe that the crypto can act as a haven when push turns to shove. On the other hand, the critics think that bitcoin and the other cryptos will soon vanish in thin air lacking any value whatsoever. Will bitcoin survive and eventually become a store of value? Only time will tell.