For more than 50 years, the U.S. dollar has dominated the world market as the top currency of choice. But that could be changing in the future, said Lazard CEO Kenneth Jacobs.
“To the extent that we have unilateral foreign policy and unilateral trade policy, we’re sort of tempting the world to find an alternative,” Jacobs told Bloomberg. “Probably the greatest demonstration of soft power is the fact that the U.S. has the reserve currency of the world.”
Jacobs stipulated that this type of economic shift is not likely to happen in the near future,, given that European and Chinese currencies are unlikely replacements. Cryptocurrency, on the other hand, is far more probable.
“There’s enough technology out in the world today with cryptocurrency and changes going on that you can imagine, if you let your mind wander a little bit, that something becomes an alternative in the future,” Jacobs added.
Of course, this is only theory, and if recent valuations have shown anything, it’s that cryptocurrency is an incredibly volatile market.
Between 2013 and 2017, for example, the price of a single Bitcoin fluctuated between $76 and $20,000. In February 2018, the average price was about $6,000.
The rapidly changing price indicates that investors are unsure as to whether cryptocurrency has any long-lasting potential or whether it’s just a technological fad. And yet, as BitDegree contributor Ray King points out, the risk is the same with any other type of investment.
“Before you invest in anything, you need a clear understanding of what your investment goals are and how you will achieve them,” King advises. “You want a good idea of how long you are prepared to keep your investment open, and what amount of profit you are happy to take. You should have the same mindset with cryptocurrency investments.”