Let’s get ready to rumble!! 

In the right corner, we have the traditional fiat currency, based on a debt-based system hatched from the Nixon Shock of 1971. It’s the man on the dollar, the paper that beats gold, it’s the world’s reserve currency…. None other than the mighty American Dollar.

And in the left corner, we have the digital saviour, built on the decentralised system of cryptographic mathematical puzzle (Hash). Coded by the anonymous Satoshi Nakamoto (or was it a group of hackers?), and has been online since 2010, birthing the Web 3.0. It’s the father of countless magic computer money, it’s the beacon of hope for a truly free market…. presenting the enigmatic Bitcoin.

With the Bitcoin “halving” scheduled for April 23, 2024, the excitement for the “bull run” and the prospect of skyrocketing “to the moon” with a potential of 100X gains, is palpable and intoxicating for crypto investors and traders. Adding to the fervour is the Exodus of nations shifting away from the Dollar, whether to circumvent the imposed sanctions or the optimistic position of hedging their assets against the reckless printing of The Federal Reserve. Many of the members of the BRICS (Brazil, Russia, India, China, South Africa and others) are searching for a greener pasture in their efforts of dedollarisation. 

Perhaps it’s time to highlight the two contending fighters and weigh out their odds. Which one of these “seashells” are capable of winning the belt and be crowned as the new world champion?

Kicking off The Dragon year of 2024 with a bang, Bitcoin is coming in strong after a steady rally of 152% in the previous year. The anticipation is high, thanks to the guaranteed upcoming “halving,” a locked-in feature set to reduce the reward of Sats (smallest unit of Bitcoin, 1 Satoshi (Sats) = 0.00000001 BTC). This reduction is expected to increase scarcity, potentially propelling the price upwards in a satisfying green candle. Following the painful red year of 2022, marked by Do Kwon’s self-inflicted failure of Luna Crash and Sam Bankman-Fried’s questionable financial practices at the FTX exchange, 2023 provided a welcome contrast with a stable, albeit dull, ascent. An ordinary year for crypto bros who are used to daily price fluctuation of 10-30% and battle wearied by 50% gains/losses that would give the Wall Street bros either a heart attack or a hard-on.

Now, all eyes are on the “Whales” (wallets with above 1000 BTC) and major investment firms, including BlackRock, Grayscale, and Valkyrie and others. Their collective anticipation hinges on was amplified by the decision of the US SEC (Securities and Exchange Commission) approval of the Spot Bitcoin ETF (exchange-traded fund) on the 10th of January.  It is starting to look a lot like the flight of the mythical beast.

“Before end of 2024, (Bitcoin) price could exceed $100k (at the time of writing: 43k), but only if Blackrock and Fidelity market maker algorithms have the ability to reduce volatility.”

- Carol Alexander, Professor of Finance, University of Sussex

cnbc.com (31 December 2023)

 

"I don't think that the world is going to convert to bitcoin. It will be computer money, but it will be government computer money.” 

- Jim Rogers, Co-Founder of George Soros’ Quantum Fund

Businessinsider.com (29 May 2023)

On the flip side, the Fed Chair Jerome Powell finds himself juggling the difficult task of keeping the Fiat/US Dollar afloat amidst the worst inflation breakout of inflation in 40 years. To counter this, Powell has raised the interest rates several times within 2023 alone. According to Reuters, Powell’s monetary policy has effectively tamed inflation at a faster pace than expected, skirting the recessions that many had anticipated. Although the Fiat currency may be severely injured and limping, but the resilient Dollar refuses to go down without a fight. 

For the first time since 2022, policymakers did not use the phrase “unacceptably high” to describe inflation. A majority of policymakers are hopeful by the projections issued at Fed’s December meeting and are seeing it trimmed by at least three-quarters of a percentage point. The target rate has been held in a range of from between 5.25% to and 5.5% since July. Despite the growing hopes of a “soft landing”, the market sentiment still lingers on the possibility of hitting a breaking point and bursting the bubble. This apprehension is fuelled by the uncertainty of the upcoming American presidential election and tense polarisation of the society.

 

"There is nothing in these minutes to dissuade us that the Fed will start to cut interest rates from this March onwards." 

- Paul Ashworth 

Chief North America economist at Capital Economics

Reuters.com (4 January 2024)

 

""The next bear market will be the worst in my lifetime, because the debt has gone up by such staggering amounts in the past 14 years."

- Jim Rogers, Co-Founder of George Soros’ Quantum Fund

Businessinsider.com (29 May 2023)

 

“... this is not the time to turn back. The public sector should keep preparing to deploy CBDCs and related payment platforms in the future.” 

- Kristalina Georgieva, Managing Director, International Monetary Fund

CNBC.com (15 November 2023)

Bringing the focus closer to home, Statista projected that the revenue of cryptocurrencies market in South East Asia will reach US$1,787.0m millions in 2024 and an annual growth rate (CAGR 2024-2028) of 8.75% resulting in a projected total amount of US$2,499.0m millions by 2028. They also expect the number of users to reach 106.20m users by 2028. Cryptocurrencies are so popular in this region that even MasterCard has partnered with the leading cryptocurrencies exchanges in the Asia Pacific and launched their own crypto-funded MasterCard payment cards in late 2021.

The high demand for alternative mediums of exchange in the East is not surprising, particularly given the daunting prospect of China’s digital Yuan, encouraging the other nations to explore the development of their own sovereign digital currencies (CBDC). Many Asians view crypto as a resistance against the potential implementation of a dystopian social credit system. Additionally, our region is also home to the largest number of underbanked and unbanked populations making cryptocurrencies a more preferred choice to navigate around the usual bureaucratic hurdles imposed by traditional banks. 

As history demonstrated time and time again, the medium of exchange has undergone multiple transformations, adapting to the evolving needs of the market and the governing bodies of the nations. From seashells to precious metals of gold and silver, from papers to plastic, and now crypto. The evolution of money is an undeniable reflection of our technological progress. Stifling the next step could deter potential innovators and investors. Personally, we advocate for embracing both traditional and emerging forms of currency. All money is monies are beautiful. 

Nevertheless, it’s crucial for individuals to exercise due diligence and follow the principle of “DYOR” (do your own research) before going “all in” and “ape out” into any stocks or crypto assets. In the world of finance and investment, critical thinking and independent research are essential for making informed decisions.

As Satoshi Nakamoto once wrote in the Bitcoin whitepaper:

“Don’t Trust, Verify.”