Due to class stratification, the traditional channels for class advancement have become scarce.
Unless an individual is talented in fields with high knowledge barriers such as AI, 5G, semiconductors, or can use the relationship resources of his parents, personal efforts alone will not be able to make a splash in the future. The dividends of history are often given to those who dare to take risks, rather than ordinary people who rely solely on hard work. When vested interests become game makers, playing by their rules will only be bound forever. If the income from labor is far less than the other party's interest, then all efforts are in vain.
Why trade in cryptocurrencies?
1. Does virtual currency have value?
The value of a currency comes from the government's credit endorsement. When a country is strong, its currency is valuable; otherwise, it may depreciate. For example, the US dollar has become a strong currency due to the strength of the United States and is widely accepted around the world. However, this also enables the US government to increase the money supply through quantitative easing and other means, affecting the global economy.
People wondered whether they could create a currency without government backing to avoid financial risks. In this context, Bitcoin was born. Through blockchain technology, it allows "miners" who actually work to get paid, rather than capitalists. The total amount of Bitcoin is fixed, and the new currency is halved every four years, maintaining a low level of currency stock and increment, meeting people's demand for economic growth and avoiding the risk of over-issuance. In addition, Bitcoin has no entity and can be split to eight decimal places, without loss, convenient and practical.
After talking about Bitcoin, let's talk about other virtual currencies. We must admit that in the current system dominated by the US dollar, it is undoubtedly a fantasy to immediately use virtual currencies as mainstream currencies. However, if we regard them as digital metals or general equivalents, it will become more reasonable.
Even in the 21st century, cross-border transactions are still a headache. Traditional bank cross-border transfers through the SWIFT system usually take 3 working days or longer. In addition, different countries have different foreign exchange control policies. However, the use of virtual currency can greatly improve the efficiency of transfers. A multi-million dollar transaction may take only 10 minutes to successfully transfer money from a foreign account to a domestic account.
Virtual currencies such as Bitcoin have the untraceability of transactions, which ensures the safety of funds. In Country A, investors may face the risk of fund freezing due to changes in policies and regulations. However, this will not happen in virtual currencies because transactions cannot be reversed.
2. The high speculation/risk of cryptocurrency trading
We can regard the wide variety of virtual currencies on the market as digital metals, and the advantages promoted in their respective white papers can be seen as the properties and gimmicks of these digital metals themselves.
During the epidemic, governments of various countries poured a large amount of hot money into the market, which led to an increase in money supply and commodity prices while the total amount of goods remained unchanged. Virtual currencies are also affected by the influx of hot money, and capital flows into markets with greater profit-seeking space. Due to its convenience, the cryptocurrency market has become a place for bankers to make profits. They raise the price of currency by creating gimmicks, and release negative news to smash the market after clearing their positions at high points, realizing a cycle of buying low and selling high to make profits.
3. High returns from cryptocurrency trading
If you have read this far, you will definitely be confused. I have been talking about the virtual currency market as a big casino. If you come in, you will be harvested by the dealer. So why should I come in and die?
This goes back to what I said earlier. Virtual currency is not completely without value. Its greatest charm lies in people's yearning for a global currency that is extremely fair and not controlled by any government. The formation of the concept of the metaverse is building a feasible scenario for the use of virtual currency in the future.
Bitcoin's "mining halving" every four years increases its rarity, providing opportunities for capital speculation, leading to a wave of bull markets in the virtual currency market every 3-4 years. When over-issued hot money pours into the market, it flows to places that can provide the most generous returns, such as the US stock market and China's real estate market.
When the cryptocurrency market can bring greater profits, capital will flow in and create a new carnival. Take my personal experience as an example. I entered the Bitcoin market in September 2017 when the price was $4,500, and the peak in mid-2021 reached more than $65,000. The profits of other altcoins such as Dogecoin are even more amazing, and a hundredfold return is not impossible.
4. When will the next bull market come?
No one can give an accurate answer. I can only say that I am more optimistic about 24-25 years. Because in 2024, Bitcoin will experience a new round of halving, and due to the Fed's series of interest rate hikes, the US economic growth will inevitably stagnate. Therefore, I estimate that the Fed will gradually cut interest rates and slowly release money supply starting from 24 years at the latest. When a new batch of huge funds pour into the market, we are expected to see the continuation of a new wave of wealth creation myths.
I am Xiao Yu. If you like my articles, please click on my avatar and follow me.
