It does make sense. They would buy USD because they need it to faciliate trade of goods and services which are denominated in that currency. It doesn't depreciate fast enough to inhibit its use for trade. Any longer term holdings are invested so they don't lose value. Thats just how the world works - look back in history of 100 years. The $USD has depreciated massively - about 98% or something, yet it didn't inhibit the most monumental period of growth the world has seen in its existence.

It's right that fiat currencies should depreciate in value over time because their primary purpose is to facilitate trade and keep prices stable, not to store value (in the long term that is, obviously they need to be stable enough to store value in the short term).


It won't be. It's academic. No fixed supply currency can be unless you have an economy that doesn't expand or contract in size. Also, if it was stable it wouldnt be doing its job. Many commentators criticise bitcoin for its volatility but it's that very volatility which indicates that it's successfully reflecting the balance of supply and demand for liquidity.