We have humanely realized that collecting the price of anything has the strongest signal. As a society, we use the form of money as an abstraction of the energy used to produce the things that sustain us. With the current development direction of cryptocurrency, we must not ignore the current market development prospects.
Yes, the technology must work, and we are moving towards a tokenized world, so the token’s price representing a specific encryption technology or community is the easiest way for laypeople to understand whether it is successful. However, if the accounting unit is associated with a banknote printing central bank/government, the PRICE = SUCCESS logo can be easily distorted.
The technological improvements provided by crypto become irrelevant because current expectations are so high. Many politicians worldwide are also aware that due to cryptocurrency, how companies, governments, and individual actors interact is inevitably about to change.
There are three types of cryptocurrency dispensers, each of which will change its portfolio based on its outlook for the first quarter of 2022.
- Some people must decide whether to allocate more fiat currencies to cryptocurrencies. They are mainly concerned about whether or not the currency will depreciate.
- Some people must decide whether to allocate more Bitcoin or Ether to other types of tokens. Their primary focus is to find projects that will have a rapid growth in technological impact or user adoption so that the price will exceed Bitcoin or Ether.
- Finally, some people must decide whether it is time to liquidate their encrypted assets and return to legal bonds or government bonds. They hope to protect the value of their wealth in units of commonly used hydrocarbons such as oil and natural gas.
This may sound repetitive, but this iterative process of the dilemma is in line with the cyclical nature of human society. Our collective action follows a predictable wave of progress. It is as if human society exists purely in the carnival. After completing this circle millions of times, we hope that the overall trajectory is progress, but stagnation and decline cannot be regarded as impossible.
If the East joins the monetary easing spree, this is a positive development for the Fed. The political heat felt by the Fed over the need to control inflation may force senior pastors to raise interest rates in the first quarter of next year. Suppose China is still actively accommodating to maintain its economic growth model. In that case, the Fed can tighten monetary policy without negatively impacting the prices of risky assets in the United States and the world. It can start working more aggressively to curb inflation and address the concerns of sure voters without hurting the wallets of the rich.
As we enter the end of the year and the first quarter of 2022, we don’t know how to buy Bitcoin at $69,000 or Ether at $5,000. However, we can imagine a chaotic, sideways, dull market, which is accompanied by small downward fluctuations and a mild recovery.
- For those who decide whether to allocate more fiat currencies to cryptocurrencies, the wait is worthwhile. But this does not mean that money will become more accessible or easier. Therefore, we should stay on the sidelines until the dust settles after the Fed raises interest rates in March 2022 or June 2022.
- For those who maintain macro cryptocurrency exposure but distribute among various coins, the coins that perform well may be related to Metaverse, Play-2-Earn, or NFT. The success of these themes does not depend on global currency conditions but actual changes in actors’ actions.
- For those who like to trade around their cryptocurrency and fiat currency positions, I think it’s wrong for a strong U.S. dollar and long-term bonds to perform well in the medium term. Similarly, the current situation will stagnate in the best case and become tighter in the worst case.