Bank of International Settlements (BIS) general manager Agustín Carstens claimed that fiat won the battle against the cryptocurrency sector. Carstens’s comments sparked outrage and debate in the community. BIS highlighted the need for regulation and risk management in the cryptocurrency field. Among other criticisms, Carstens claimed that,
“technology doesn’t make for trusted money.”
In a recent tweet, Galaxy Digital CEO, Mike Novogratz, responded to the comments made by Carstens. According to the Galaxy Digital boss,
“Carstens has held a stubborn view that doesn’t hold up to the facts.”
Novogratz pointed out that over the last ten years, several fiat currencies have depreciated by more than 50%. Meanwhile, cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH) have increased in value by multiple folds. Novogratz stated,
“He of all people should know this And $BTC and $ETH have appreciated a ton.”
Novogratz further added that around 200 million people trust Bitcoin (BTC).
Nathaniel Barker, the senior editor at Seeking Alpha, asked Novogratz to name one fiat currency from a developing nation that has depreciated more than 50% in 10 years.
The Galaxy Digital CEO replied that the Indian rupee has fallen 70% against the dollar, while the Chinese yen has fallen 50%. He stated,
“Turkish Lira vs $$ has gone from 1.5 to 18, $\INR is off 70%, $/Yen ent 50% in 18 months, and every currency has depreciated vs BTC a ton…”
Is Novogratz right that cryptocurrency has not lost against fiat?
Although Novogratz has a point about fiat currencies depreciating over the years, it should be noted that fiat is still regulated and stable. Although Bitcoin (BTC) has appreciated in ten years, it is very volatile. The asset has fallen 64.68% from an all-time high of almost $69k in little over a year.
The battle between cryptocurrencies and fiat will likely remain a topic of discussion. However, both have their own set of merits and demerits. Fiat offers stability and government assurance. Cryptocurrencies offer anonymity and are less susceptible to depreciating factors. And while fiat currency depreciates quickly, cryptocurrencies are extremely volatile.