Ripple CEO, Brad Garlinghouse declared that 2021 will see more adoption of digital assets and growth of the crypto market as more people will be looking to diversify their portfolios into cryptocurrencies.
Garlinghouse made the remarks in response to his interview with CNN’s Julia Chatterley where he said that 2020 has been an exciting year for the crypto market with several factors driving spectacular gains.
Fiat Inflation Makes Crypto A Dependable Store Of Value
The Coronavirus has boosted the use of digital currencies for payments, investments and as a store of value. This has led to the adoption of cryptocurrencies by institutional investors, high net individuals and big businesses like Square, MicroStrategy and PayPal.
Garlinghouse said that during the pandemic, governments around the world have played a key role in boosting the performance and adoption of cryptocurrencies in 2020. One of the macro dynamics driving the rally is fiat inflation.
Fiat inflation has driven more people to desire to hold non-inflationary assets like cryptocurrencies, most of which have a known circulating and total supply.
The utility of Digital Assets
While differencing store of value and utility in digital currencies, Garlinghouse said that both are important aspects of a cryptocurrency.
However, environmental impacts, like climate change and energy usage of digital currencies will determine the sustainability of a crypto asset.
In the case of XRP, Garlinghouse said it is more efficient than other currencies based on the Proof of Work consensus algorithm like Bitcoin.
Garlinghouse: Bitcoin Will Not Be Easily Replaced
Despite top performance from Bitcoin and the highest dominance in the crypto market, other crypto assets in 2020 have outshined the top coin. Bitcoin, Ethereum, and XRP are the top three cryptocurrencies by market cap. However, when looking at yearly gains, Ethereum’s 304% leads both XRP and Bitcoin whose one-year gains stand at 186% and 162% respectively.
While answering a question about whether 2020 marks the start of the fall of Bitcoin’s dominance over other digital assets, Garlinghouse said that Bitcoin is critical and will keep playing an overall important role, especially as an entry point into the crypto market.