With the latest injections of cash into economies hard hit by the latest pandemic, forex markets are in for a shaky ride while most cryptocurrencies should see a surge in value. This is just a prediction using simple influential factors that affect both fiats and cryptos.

What is about to happen is a mass injection of cash into several economies which in turn will lead to the devaluation of many fiat currencies, while cryptos like BTC will never increase the number of coins in circulation which should mean its value will increase considerably. Any other cryptos with a fixed supply such as NEO, XRP, Bitcoin Cash, EOS, Dash, Ethereum Classic, Binance Coin, Litecoin, and so forth should also see increases in values.

Here is why…

Governments around the world are now activating their stimulus packages to fight against the economic downturn caused by the Coronavirus. The solution is to inject more cash into the economy to keep public spending high which is great for business.

The downside to injecting more fiat currency into a country is that this will eventually lead to more currency in circulation i.e. more cash will need to be minted. Countries with the largest stimulus packages will see their currency depreciate because the simple nature of cash is that the more there is in circulation, the less valuable it becomes. Effectively, it depreciates against other currencies.

For example, the US Congress has already approved $484 billion for economic relief. This likely means the US has issued new bonds to achieve this figure. In turn, if we sum up all the bank accounts globally that hold US$ plus add the 1.4 trillion in US$ currently in circulation, we will need to the $484 billion to that figure. That much extra US$ available means the currency should depreciate.

We reasonably make this calculation because we already know the US does not have $484 billion due to its surging national debt which is already at around $24.95 trillion. Other countries with high national debt will also be the same. These include the UK, EU, and numerous other countries that have high national debt who will be activating their economic stimulus packages. As with the US$, the issuance of bonds to cover much of these stimulus packages will also devalue their currencies.

However, let’s not forget that this is a ‘global pandemic’. That means all countries are suffering from similar issues. Take Thailand or example, it doesn’t have high national debt, but the country heavily relies on tourism but currently there are no international visitors allowed. It too has had to come up with a stimulus package as has Malaysia, Singapore, India, and many other Asian countries.

In some ways, the fact that all these countries need to inject economic recovery packages also means that their currencies will depreciate. In the end, more currency in all countries will end up in circulation which will inevitably offset some of the fluctuations we will see in the forex markets over a couple of years.

Arguably, the best way to predict which currency will depreciate the most is to look at which countries are injecting the most money versus their gross domestic product (GDP). These are going to be the hardest hit in terms of currency depreciation.

Meanwhile, in cyberspace, cryptos will remain relatively unaffected. Now if you look at the fact that numerous cryptos will not be increasing their circulation of tokens or coins, and compare this to all the countries around the world that will eventually need to mint more currency, and the theory is then one that suggests cryptocurrencies are set for a sharp rise over the next couple of years.

It makes perfect sense. On top of this, as currencies start to lose their value, the appeal to trading online or overseas using cryptos will increase. People will start to see cryptos as another option for saving, especially if they start to increase as predicted. It just goes to show that with every dark cloud there is a silver lining and that silver lining looks set to line the pockets of crypto investors.

For those that have not yet considered investing in crypto, then why not start with something simple like BAT. You how to earn bat here, which is a useful resource on how to get started in the world of cryptocurrencies. One thing is for sure, now is the time to take the risk because all the markers and indicators currently suggest that cryptos make up means many are going to see an increase in value.