Cryptocurrency

How Does Gresham’s Law Relate To Bitcoin

To many, bitcoin is the soundest money the world has ever seen. In this article we dive into Gresham’s law and discuss how bitcoin will eventually overtake the dollar, and all other fiat currencies. We cover what Gresham’s law is, how it relates to bitcoin, and whether bitcoin exhibits characteristics of good money as it relates to Gresham’s law.

What Is Gresham’s Law?

Investopedia states: “Gresham’s law is a monetary principle stating that ‘bad money drives out good.’ It is primarily used for consideration and application in currency markets. Gresham’s law was originally based on the composition of minted coins and the value of the precious metals used in them. However, since the abandonment of metallic currency standards, the theory has been applied to the relative stability of different currencies’ value in global markets.”



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