Last year was a year of several implosions in the crypto space. The biggest one was the FTX collapse in November 2022. The contagion the FTX collapse triggered continues to send ripples across the entire crypto industry. Consequently, there has been a lot of fear, uncertainty, and doubt (FUD) out there. In fact, some analysts have had the cause to ask whether bitcoin and even its underlying technology, blockchain, really have any utility or value as advocated by its adopters and believers.
Does 2023 promise a market recovery or will the year witness more collapses, following the FTX contagion? Also, considering the several regulatory actions being taken by some regulators against Kraken’s staking-as-a-service product, Binance-branded BUSD, and others still counting, the crypto market does not look very bullish.
So after our Valentine’s Day date with ChatGPT, we decided to go on another date with ChatGPT. This time, ChatGPT shared with us its thoughts on bitcoin, stablecoin, and central bank digital currencies (CBDCs). Specifically, below were the questions we asked ChatGPT:
- Will bitcoin hit US$100,000 in 2023?
- Between bitcoin and stablecoins, which is more likely to last?
- In order to prevent inflation, bitcoin supply has been capped at 21 million max. Is it likely that this cap would be removed when the entire 21 million bitcoin has been mined?
- Do central bank digital currencies (CBDCs) provide a greater level of trust compared to decentralized cryptocurrencies such as bitcoin, Ethereum, etc?
Will bitcoin hit US$100,000 in 2023?
As a language model developed by OpenAI, I don’t have the ability to predict future market movements with certainty. However, it’s worth noting that the cryptocurrency market can be extremely volatile, and the price of Bitcoin and other cryptocurrencies can be influenced by a wide range of factors such as regulatory changes, global economic conditions, and market sentiment.
So while it’s possible that the price of Bitcoin could reach US$100,000 in 2023, it’s also possible that it might not. It’s important to consider all the potential risks and uncertainties before making any investment decisions.
Between bitcoin and stablecoins, which is more likely to last?
It is difficult to predict which of Bitcoin and stablecoins will last in the long term. Both have their own unique features and design objectives, and the future of each will depend on various factors such as technological advancements, regulatory changes, and market adoption.
Bitcoin is the world’s first decentralized cryptocurrency, and it is designed to operate as a store of value and a medium of exchange. Bitcoin’s value is based on its scarcity, as there is a limited supply of 21 million bitcoins that will ever be created. Over the years, Bitcoin has established a strong following among supporters who believe in the potential of decentralized currencies and blockchain technology.
Stablecoins, on the other hand, are cryptocurrencies that are pegged to a stable asset such as the US dollar, making their value less volatile compared to Bitcoin and other cryptocurrencies. This stability makes stablecoins more appealing to some people as a means of payment and as a store of value. Stablecoins can also be used to hedge against market volatility, which is one of the reasons why they are becoming increasingly popular.
Ultimately, both Bitcoin and stablecoins have the potential to last in the long term, but their future will depend on various factors such as technological advancements, regulatory changes, and market adoption. It’s important to consider all the potential risks and uncertainties involved before making any investment decisions.
In order to prevent inflation, bitcoin supply has been capped at 21 million max. Is it likely that this cap would be removed when the entire 21 million bitcoins have been mined?
The cap on the maximum supply of Bitcoin is a key feature of the cryptocurrency and is intended to prevent inflation. As of now, it is not likely that this cap will be removed, as doing so would fundamentally change the nature of Bitcoin and would require consensus from a large portion of the Bitcoin community.
Bitcoin was designed to operate as a decentralized and transparent system, and the cap on the maximum supply is a critical part of this design. By limiting the total number of bitcoins that will ever exist, Bitcoin’s creators aimed to create a scarce asset that would have value based on its scarcity. Removing the cap on the supply would effectively make Bitcoin just another fiat currency and would likely lead to inflation.
That being said, the future of Bitcoin is uncertain and it is impossible to predict with certainty what changes may be made to the cryptocurrency in the future. Some people in the Bitcoin community may advocate for changes to the maximum supply cap if the demand for Bitcoin changes, but such changes would require a high level of consensus and would likely be controversial.
Overall, the cap on the maximum supply of Bitcoin is one of the key features of the cryptocurrency and is unlikely to be removed in the near future.
Do central bank digital currencies (CBDCs) provide a greater level of trust compared to decentralized cryptocurrencies such as bitcoin, Ethereum, etc?
Central bank digital currencies (CBDCs) and decentralized cryptocurrencies have different features and design objectives, and the level of trust they provide can depend on various factors.
CBDCs are digital representations of a country’s national currency, issued and backed by the central bank of that country. They are designed to provide a more efficient and secure means of making digital payments, and they generally offer a higher level of consumer protection compared to decentralized cryptocurrencies like Bitcoin or Ethereum. For example, since CBDCs are issued by a central authority, they can be regulated and monitored to prevent fraud and money laundering.
On the other hand, decentralized cryptocurrencies like Bitcoin and Ethereum are built on blockchain technology, which provides a decentralized and transparent ledger of transactions. This allows users to transact directly with each other without the need for intermediaries, but it also makes it more difficult for governments to regulate and monitor these transactions.
In terms of trust, CBDCs may be seen as more trustworthy by some people because they are backed by a central authority and can be regulated, while decentralized cryptocurrencies may be seen as more trustworthy by others because they are not controlled by any central authority and provide a higher degree of privacy and security. Ultimately, the level of trust that an individual has in CBDCs or decentralized cryptocurrencies will depend on their own personal beliefs, risk tolerance, and investment goals.
Avoid jumping into bandwagons!
So there you have it! As with most things in life, nothing is 100% certain in the crypto space.. As ChatGPT advised, “It’s important to consider all the potential risks and uncertainties before making any investment decisions”.
Also, comparing bitcoin with CBDCs or bitcoin with stablecoins may just be one trying to compare apples and mangoes. Bitcoin, stablecoins, and CBDCs each have their unique features, functions, and even goals.
Perhaps one of the most important factors in the crypto space is YOU: Your investment goals, your motivations, and your appetite for risk. Avoid jumping into bandwagons!
