Bitcoin faces challenges in replacing the dollar as global reserve currency due to centralized holdings

From Nasdaq Corporation

June 23, 2025 6:00 am:

As concerns grow over tariffs and a potential trade war, some investors speculate that Bitcoin could replace the U.S. dollar as the global reserve currency. However, Bitcoin currently does not meet the criteria required for a reserve currency, lacking qualities such as widespread use as a medium of exchange.

Despite being seen as a store of value, Bitcoin is not commonly used for everyday transactions or as a unit of account. The lack of widespread adoption for pricing goods and services in Bitcoin hinders its potential to become a true reserve currency.

While discussions arise about Bitcoin potentially replacing the dollar in 2025 due to economic factors, the hoarding of Bitcoin by individuals, companies, and governments poses a significant challenge. As more entities retain Bitcoin without selling, the scarcity of available Bitcoin could hinder its viability as a global reserve currency.

Reports indicate that the concentration of Bitcoin holdings among a few centralized entities, such as corporations and investment firms, is increasing. This trend towards centralization contradicts Bitcoin’s original vision of decentralization and widespread adoption, potentially limiting its future prospects as a global currency.

Despite challenges in becoming a global reserve currency, the demand for Bitcoin continues to rise among various entities, including corporations, banks, and governments. Regardless of its status as a reserve currency, Bitcoin remains an attractive investment option for many due to its increasing popularity and adoption.

While investors may consider investing in Bitcoin, it’s essential to weigh the potential risks and rewards. The Motley Fool Stock Advisor team has identified 10 stocks with significant growth potential, excluding Bitcoin. These stocks have historically outperformed the market, offering substantial returns for investors. It’s crucial to consider all investment options before making a decision.

Read more at Nasdaq: Could Bitcoin Replace the Dollar and Become the Global Reserve Currency?