As Bitcoin approaches $30,000, traders closely monitor the cryptocurrency market each morning for new trading opportunities. Recently, a report from Standard Chartered forecasts a potential for Bitcoin to reach $120,000 by the end of 2021. While this news brings optimism to many traders and investors, Tim Frost, the CEO of digital wealth platform Yield App, instead sees a 2024 bull market — a market characterized by strong buying pressure — on the horizon. Despite increased blockchain confidence in China, the viability of a freely convertible CNY stablecoin is dubious.
Challenges in Developing a Freely Convertible CNY Stablecoin
Also driving optimism among investors is the current wave of buying Chinese crypto tokens, particularly Conflux (CFX). As the Hang Seng Index rises 4% in the last six months, a strong correlation between crypto markets and the Chinese ones is becoming apparent. Crypto tokens are gaining widespread availability through domestic payment rails both in China and Hong Kong, which is in the advanced stages of being able to license crypto exchanges for retail investors.
The feasibility of a freely convertible CNY stablecoin is uncertain despite rising blockchain optimism in China. Here’s why. China’s strict monetary policies prevent the yuan from being freely convertible, making a CNY stablecoin challenging. Beijing’s policy allows control over export prices, maintains domestic economic stability, and mitigates foreign exchange rate risks. (gravityhair.com) IMF’s Gita Gopinath supports the need for global currencies to have free capital movement and exchange rate convertibility.
Innovation Paving the Way for Crypto Adoption
Taiwan also has capital controls restricting the amount of currency that can be taken out of the country. Taipei denies currency manipulation accusations and highlights the open equities market and free foreign currency convertibility as evidence. Given Bitcoin’s current value and strong performance, many investors find it compelling to continue investing in the cryptocurrency. Furthermore, Frost points out, “Behind closed doors, huge innovation is paving the way for the next wave of crypto adoption.”
The future of Bitcoin and the accuracy of the $120,000 price prediction remain uncertain in the market. A bullish market in 2024 is becoming more plausible, supported by innovative technologies and positive traditional market sentiment. Crypto trading is booming worldwide, as investors seek higher returns compared to traditional markets. Risk appetite is increasing.
Disclaimer: Cryptocurrency trading involves significant risks and may result in the loss of your capital. You should carefully consider whether trading cryptocurrencies is right for you in light of your financial condition and ability to bear financial risks. Cryptocurrency prices are highly volatile and can fluctuate widely in a short period of time. As such, trading cryptocurrencies may not be suitable for everyone. Additionally, storing cryptocurrencies on a centralized exchange carries inherent risks, including the potential for loss due to hacking, exchange collapse, or other security breaches. We strongly advise that you seek independent professional advice before engaging in any cryptocurrency trading activities and carefully consider the security measures in place when choosing or storing your cryptocurrencies on a cryptocurrency exchange.
