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Edited by Kitu11 at 22-12-2023 01:17 PM
Over the past three years, especially in the last two, there have been many articles on predicting digital currencies, and they have been generally accurate.
The only slight mistake was the drop in Bitcoin from sixty thousand (I accurately predicted the plunge, as mentioned in multiple previous articles). I predicted the bottom range to be around twenty thousand dollars, with a low point of ten thousand dollars, and an extreme low point possibly reaching five thousand dollars. The results were essentially in line. It eventually dropped to just over thirteen thousand but didn't go lower. The main reason was the sudden collapse of a U.S. bank, with the government injecting liquidity to rescue the market, stimulating a rebound in digital currencies. This was a black swan event, unpredictable. As we've said before, predictions are made based on actual circumstances, and when circumstances change, results will also change.
Apart from this, I made hundreds of predictions, big and small, including the bearish and rebound trends of digital currencies, the main sleeping times, etc. Not one was wrong, which could be considered a miracle. My articles remain unchanged (in June 2021, to deal with sensitive words, I changed sensitive words in over ten articles, totaling less than a hundred words). Everyone can verify.
Now, let's predict the future direction of the world's currencies, but of course, in general terms.
Firstly, digital currencies will gradually dominate the mainstream, and this process will also be the gradual decline of the U.S. dollar. It will shift from being a quasi-world currency to one of the world's major currencies, with other newly rising regional currencies, such as the digital euro, digital yuan, encrypted digital currencies, stablecoins, each occupying a certain position, competing with each other. The U.S. dollar's share will decrease from around fifty percent now to about thirty percent.
Even if the U.S. dollar's position declines, its influence will remain strong, as old habits die hard. Despite a decline in status, it will still have a significant market.
Secondly, digital fiat currencies from some countries will rise to fill some of the void left by the U.S. dollar, especially the digital yuan issued by the world's second-largest economic entity. In the future, as the digital revolution progresses, the economic weight of various countries will continuously adjust, and their currency status will rise and fall. The digital yuan, without considering costs, may see its market share rise significantly from around three percent to about ten percent. On the other hand, the digital euro's position may relatively decline, possibly decreasing from around thirty percent to about twenty percent.
Other digital fiat currencies, including the digital pound, digital mark, digital yen, digital rupee, etc., added together, may account for about fifteen percent.
Next are new types of currencies.
New types of currencies primarily refer to cryptocurrencies and stablecoins. The market share of these two types of currencies will steadily rise.
Stablecoins are primarily used as a link between cryptocurrencies and fiat currencies, mainly as exchange and settlement tools to compensate for the shortcomings of cryptocurrencies' volatile nature. They don't have the potential for appreciation and will only depreciate in sync with the devaluation of the fiat currency they're pegged to. Therefore, they cannot be used as investment tools. In the future, their upward space is limited. Although various countries tend to favor stablecoins, their lack of appreciation potential means they are used less by the public for investment. Even with vigorous promotion, their market share is estimated to be around five percent.
Cryptocurrencies, on the other hand, are the most tenacious currency for the future, and their market share will quickly rise from zero to about ten percent, a significant improvement. This is because top cryptocurrencies have two unique features that other currencies do not possess. First, they provide independent international trade settlements. Second, they appreciate (the proportion of ""air coins"" will continuously shrink, possibly to zero). The remaining ten percent is left for various currency shares, and there may be a surprise currency that rises suddenly, but the overall proportion should not differ too much from my prediction.
Throughout history, only physical currencies have the potential for appreciation. Any fiat currency will depreciate with excessive issuance, while cryptocurrencies, due to their continually developing ecosystems, will appreciate continuously. From this perspective, cryptocurrencies with valuable ecosystems for investment are more similar to stocks. Good stocks can multiply in price by thousands or even tens of thousands, and good public blockchain tokens are the same.
When the world's currencies are divided into two categories—one constantly appreciating, stable cryptocurrencies with investment value, and the other constantly depreciating digital fiat currencies, stablecoins, and air coins—the choice for the public is evident.
If the over-issuance of currency exceeds five percent, the devaluation of fiat currencies may also reach three to five percent. Stablecoins, linked to fiat currencies, will follow the same principle. As speculative assets, air coins are not suitable as reserve currencies and will not be discussed here.
The appreciation of cryptocurrencies is unpredictable due to the development of their ecosystems and applications. I estimate that, in the most conservative scenario, there may be a twenty percent increase. The highest might be fifty to five hundred percent.
On average, there may be a thirty percent increase (investable ones are relatively stable, with a lower possibility of a sharp drop). This is in the initial stages, and future progress depends on the second world.
A currency with a steady annual appreciation rate of thirty percent, which is also stable and not prone to a sharp drop, has never happened in history. Therefore, once it is introduced, it will inevitably trigger public enthusiasm. Even those who claim to be most patriotic cannot possibly convert appreciating cryptocurrencies into fiat currencies to support fiat currencies (some may think it has risen too much and convert some to fiat, but this is speculative and likely to be left behind). Instead, they may follow the example of the Vietnamese in the past few years, spending their salaries immediately or converting them into slowly depreciating U.S. dollars or gold. This is the advantage of public blockchain tokens with investment value, which are incomparable to any fiat currency or stablecoin.
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Post time 15-11-2023 20:43:03