The Future of Stable Currencies and the Recovery of Cryptocurrency in 2021

03/08/2023 12:01 • Blockchain Briefs • 126 views

On March 8, CZ said in the AMA that the stable currency supported by the legal currency will not exist for a long time, and the stable currency will continue to evolve and iterate. In the long run, stable currencies supported by illegal currencies may dominate in 10 to 20 years. It is expected that this year will be a year of recovery of encryption adjustment, and there is no expectation of setting a new high.

CZ: The stable currency supported by legal currency will not exist for a long time. It is expected that this year will be a year of recovery of encryption adjustment

Analysis based on this information:

CZ’s recent statement in the AMA highlights an interesting phenomenon in the world of cryptocurrency. According to him, stable currencies supported by legal tender will not remain stable forever. They will continue to evolve and iterate, and sooner or later, stable currencies supported by illegal currencies may dominate the market.

Stable currencies have gained popularity in recent years due to their ability to offer stability to investors amidst volatile market conditions. They are backed by a reserve asset, such as fiat currency, gold or other cryptocurrencies, to maintain a steady value.

The most commonly used stable currency is Tether (USDT), which is backed by the US dollar. However, some critics have raised concerns about the transparency and legitimacy of the reserves used to back USDT.

CZ’s statement about the evolution of stable currencies suggests that the market is looking for alternatives that offer greater transparency and security. Stable currencies supported by illegal currencies may emerge as a new solution. These currencies could be backed by assets such as drugs, weapons, and counterfeit goods, which are worth trillions of dollars globally.

However, this scenario raises ethical concerns, and it is unclear how regulators will respond to such a development. It is also worth noting that illegal currencies are prone to fluctuations and may not offer the same stability as legal currencies.

Additionally, CZ’s statement about the recovery of cryptocurrency in 2021 is also noteworthy. The cryptocurrency market has experienced significant fluctuations over the past few years, with Bitcoin reaching an all-time high of nearly $65,000 in April 2021 before crashing to under $30,000 in July 2021.

However, CZ does not anticipate a new high in the near future. This suggests that the market needs time to recover from the recent instability and find a new equilibrium. However, CZ’s statement also offers hope for a gradual recovery in the near future.

In conclusion, the evolution and domination of stable currencies and the recovery of cryptocurrency in 2021 are important factors to consider for investors and regulators alike. The emergence of stable currencies backed by illegal currencies could have far-reaching implications for the future of finance, and it remains to be seen how regulators will respond. Meanwhile, the recovery of cryptocurrency offers hope for investors and enthusiasts who believe in its long-term potential.

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