Tim Draper Explains Why Bitcoin Will Overtake Fiat

According to Draper, Bitcoin is a "better and safer technology" than fiat currency.

American venture capitalist Tim Draper predicts that the price of Bitcoin will soar in the future due to the advantages of cryptocurrencies over fiat currencies.

The billionaire claimed in 2020 that the COVID-19 pandemic will have catastrophic consequences for the global economy, but it will be a factor for BTC to thrive. The following year, the major digital asset climbed to an all-time high of nearly $70,000, while the financial crisis and record inflation shut down much of the world.

This is why BTC is better

One of Bitcoin's biggest proponents, Tim Draper, stepped up his support for the Bitcoin asset in a recent interview with Fox Business.

He believes it will "surpass fiat currencies" due to its advantages over the U.S. dollar and other currencies. He added that one flaw with national currencies is that they are controlled by banks or governments, whereas BTC’s network is secured by “hundreds of thousands of nodes”:

"There have to be banks and governments to decide which currency is good, and that's not as effective as owning bitcoin, which has a trusted third party with hundreds of thousands of nodes checking to make sure The transaction was completed correctly.".

Tim Draper, Source: CNBC

It’s worth mentioning that central banks can also influence the supply of fiat money by printing in large quantities.

For example, the Federal Reserve printed trillions of dollars in 2020 and 2021 in response to the fallout from the coronavirus outbreak. While the move helped somewhat at first, it has since played a role in why U.S. inflation is hitting record highs.

At the same time, the maximum supply of Bitcoin is fixed at 21 million. Many proponents believe this gives the asset an upper hand against inflation. Additionally, its decentralized nature (no banking institution or government can control it) could make it more attractive than fiat currencies, whose supply is constantly adjusted by central authorities.

"So I think it's better, safer technology, and eventually the rest of the world will get on board," Draper concluded.

Previous prediction failed

The American billionaire's predictions for Bitcoin's future valuation have not always been accurate. In 2021, he predicted that BTC would climb to $250,000 by the end of last year, while in 2020, he expects the asset to reach this milestone in early 2023. Bitcoin is on track with the $250,000 target despite the massive price rise over the past three years.

In a recent tweet, Draper stated that "we'll have to wait a little longer (maybe 2 years)" for Bitcoin to soar to this level.