How high a of a market cap would bitcoin need to have to be 'stable'? - page 3.

InwardContour

sr. member

Activity: 644

Merit: 260

Quote from: Este Nuno on July 04, 2014, 02:14:51 PM

Quote from: BitchicksHusband on July 03, 2014, 04:37:32 PM

Quote from: Este Nuno on June 19, 2014, 12:47:40 PM

Or at least different market caps for different levels of stability.

What is your estimate for +-1% variation and +-3% variation. Or what do you think is the most realistic +-% range that we'll see?

Gold is what, 9 trillion? And it's still often volatile. I'm guessing this is purely due to speculation.

Do you consider gold stable?

Not really. But it's a lot more stable than bitcoin and and if bitcoin were ever to become as volatile as gold I would consider that a big step forward.

Gold is still more stable then a lot of 3rd world currencies. Over the long term bitcoin could potentially supplement currencies in the "3rd world" allowing it to reach it's true potential

freedomno1

legendary

Activity: 1806

Merit: 1090

Learning the troll avoidance button :)

Well when you consider it from a small percentage movement instead of a cash value then one can consider it more or less stable.

ShakyhandsBTCer

sr. member

Activity: 448

Merit: 250

It's Money 2.0| It’s gold for nerds | It's Bitcoin

Quote from: Este Nuno on July 03, 2014, 03:31:09 PM

Quote from: GangkisKhan on July 03, 2014, 01:01:01 PM

Given how mining work for bitcoin, I do not think the price will stable.

It has to keep going up so miners can have "profit" in either profit or transaction fee.

Well, it can still go up and be relatively stable as well.

Generally speaking if something is rising in price at a rapid rate it will not be considered stable.

Harley997

sr. member

Activity: 266

Merit: 250

Quote from: BitchicksHusband on July 03, 2014, 04:37:32 PM

Quote from: Este Nuno on June 19, 2014, 12:47:40 PM

Or at least different market caps for different levels of stability.

What is your estimate for +-1% variation and +-3% variation. Or what do you think is the most realistic +-% range that we'll see?

Gold is what, 9 trillion? And it's still often volatile. I'm guessing this is purely due to speculation.

Do you consider gold stable?

Gold is a commodity and commodity's do not generally have stable prices, that is why there are futures markets for commoditys - so buyers and sellers can hedge their prices

Este Nuno

legendary

Activity: 826

Merit: 1000

amarha

Quote from: BitchicksHusband on July 03, 2014, 04:37:32 PM

Quote from: Este Nuno on June 19, 2014, 12:47:40 PM

Or at least different market caps for different levels of stability.

What is your estimate for +-1% variation and +-3% variation. Or what do you think is the most realistic +-% range that we'll see?

Gold is what, 9 trillion? And it's still often volatile. I'm guessing this is purely due to speculation.

Do you consider gold stable?

Not really. But it's a lot more stable than bitcoin and and if bitcoin were ever to become as volatile as gold I would consider that a big step forward.

InwardContour

sr. member

Activity: 644

Merit: 260

Quote from: Erdogan on July 03, 2014, 03:48:40 AM

Quote from: DannyElfman on July 03, 2014, 12:28:31 AM

Quote from: Erdogan on July 02, 2014, 10:11:59 AM

Quote from: Este Nuno on June 19, 2014, 01:22:21 PM

Would it take governments deciding to hold bitcoin in their reserves for bitcoin's market cap to reach these heights or not? Or is private capital sufficient to get bitcoin to the 100 billion, 500 billion or 2 trillion dollar market caps mentioned?

When some country buys another currency for reserves, yes that strengthens the foreign currency.

The only reason to have reserves, is to manipulate (also called stabilize) a local fiat currency. If the fiat currency in question were allowed to float, reserves would not be necessary.

If a country has a trade surplus and nothing to spend the excess currency that is pouring into the country then it will have foreign currency reserves.

That is not enough, the foreign money has to somehow get into the pockets of the government.

Most governments charge some kind of tariff when goods are imported, these can be paid for with foreign currency. Governments also often have some kind of ownership stake in various industries.

BitchicksHusband

sr. member

Activity: 378

Merit: 255

Quote from: Este Nuno on June 19, 2014, 12:47:40 PM

Or at least different market caps for different levels of stability.

What is your estimate for +-1% variation and +-3% variation. Or what do you think is the most realistic +-% range that we'll see?

Gold is what, 9 trillion? And it's still often volatile. I'm guessing this is purely due to speculation.

Do you consider gold stable?

Tzupy

legendary

Activity: 2128

Merit: 1074

Bitcoin price was relatively stable during 2012, because of high supply and concentrated trading at MtGox.
Now with lower supply (and more hoarding) and market fragmentation, it's much easier to pump bitcoin.

Este Nuno

legendary

Activity: 826

Merit: 1000

amarha

Quote from: GangkisKhan on July 03, 2014, 01:01:01 PM

Given how mining work for bitcoin, I do not think the price will stable.

It has to keep going up so miners can have "profit" in either profit or transaction fee.

Well, it can still go up and be relatively stable as well.

GangkisKhan

full member

Activity: 141

Merit: 100

Given how mining work for bitcoin, I do not think the price will stable.

It has to keep going up so miners can have "profit" in either profit or transaction fee.

Erdogan

legendary

Activity: 1512

Merit: 1005

Quote from: DannyElfman on July 03, 2014, 12:28:31 AM

Quote from: Erdogan on July 02, 2014, 10:11:59 AM

Quote from: Este Nuno on June 19, 2014, 01:22:21 PM

Would it take governments deciding to hold bitcoin in their reserves for bitcoin's market cap to reach these heights or not? Or is private capital sufficient to get bitcoin to the 100 billion, 500 billion or 2 trillion dollar market caps mentioned?

When some country buys another currency for reserves, yes that strengthens the foreign currency.

The only reason to have reserves, is to manipulate (also called stabilize) a local fiat currency. If the fiat currency in question were allowed to float, reserves would not be necessary.

If a country has a trade surplus and nothing to spend the excess currency that is pouring into the country then it will have foreign currency reserves.

That is not enough, the foreign money has to somehow get into the pockets of the government.

DannyElfman

sr. member

Activity: 406

Merit: 250

Quote from: Erdogan on July 02, 2014, 10:11:59 AM

Quote from: Este Nuno on June 19, 2014, 01:22:21 PM

Would it take governments deciding to hold bitcoin in their reserves for bitcoin's market cap to reach these heights or not? Or is private capital sufficient to get bitcoin to the 100 billion, 500 billion or 2 trillion dollar market caps mentioned?

When some country buys another currency for reserves, yes that strengthens the foreign currency.

The only reason to have reserves, is to manipulate (also called stabilize) a local fiat currency. If the fiat currency in question were allowed to float, reserves would not be necessary.

If a country has a trade surplus and nothing to spend the excess currency that is pouring into the country then it will have foreign currency reserves.

Erdogan

legendary

Activity: 1512

Merit: 1005

Quote from: Este Nuno on June 19, 2014, 01:22:21 PM

Would it take governments deciding to hold bitcoin in their reserves for bitcoin's market cap to reach these heights or not? Or is private capital sufficient to get bitcoin to the 100 billion, 500 billion or 2 trillion dollar market caps mentioned?

When some country buys another currency for reserves, yes that strengthens the foreign currency.

The only reason to have reserves, is to manipulate (also called stabilize) a local fiat currency. If the fiat currency in question were allowed to float, reserves would not be necessary.

ShakyhandsBTCer

sr. member

Activity: 448

Merit: 250

It's Money 2.0| It’s gold for nerds | It's Bitcoin

Quote from: DannyElfman on June 28, 2014, 08:28:42 PM

Quote from: ShakyhandsBTCer on June 24, 2014, 01:10:39 AM

Quote from: InwardContour on June 22, 2014, 11:45:32 PM

Quote from: IIOII on June 22, 2014, 08:43:02 AM

I'm not sure if market cap is the only relevant factor for price stability. I think equally or even more important is the main use of bitcoin.

I'd argue that the more bitcoin is used for transactions the less volatile it will be. If bitcoin is primarily seen as a commodity it will have higher volatility than if it's primarily used as a transactional currency. With market capitalization in the trillions and primarily commodity properties it will have gold-like volatility which is still substantial but would not impede usability either.

This is 100% correct. It is not so much market cap that affects stability but total transaction volume, both measured by goods/services to bitcoin and by exchange volume.

Once TX volume picks up (from TX of actual trades involving goods/services) then the price of bitcoin should stabilize.

I would say the opposite. I would say that once the price stabilizes then trade volume would increase as people will be less susceptible to losing money between the time they acquire the bitcoin and the time they spend the bitcoin

When you have more trades, you will have more people buying/selling bitcoin (and higher volume), when you have more volume of bitcoin being traded it will take more money to move the price then when volume is lower

DannyElfman

sr. member

Activity: 406

Merit: 250

Quote from: ShakyhandsBTCer on June 24, 2014, 01:10:39 AM

Quote from: InwardContour on June 22, 2014, 11:45:32 PM

Quote from: IIOII on June 22, 2014, 08:43:02 AM

I'm not sure if market cap is the only relevant factor for price stability. I think equally or even more important is the main use of bitcoin.

I'd argue that the more bitcoin is used for transactions the less volatile it will be. If bitcoin is primarily seen as a commodity it will have higher volatility than if it's primarily used as a transactional currency. With market capitalization in the trillions and primarily commodity properties it will have gold-like volatility which is still substantial but would not impede usability either.

This is 100% correct. It is not so much market cap that affects stability but total transaction volume, both measured by goods/services to bitcoin and by exchange volume.

Once TX volume picks up (from TX of actual trades involving goods/services) then the price of bitcoin should stabilize.

I would say the opposite. I would say that once the price stabilizes then trade volume would increase as people will be less susceptible to losing money between the time they acquire the bitcoin and the time they spend the bitcoin

Harley997

sr. member

Activity: 266

Merit: 250

Quote from: Dalmar on June 24, 2014, 07:08:05 PM

Quote from: cr1776 on June 22, 2014, 06:57:10 AM

Quote from: Dalmar on June 19, 2014, 01:52:33 PM

Even gold with its huge market cap is still relatively volatile. Bitcoin will always be relatively volatile as long as it isn't used as a widespread unit of account.

Is it really gold that is volatile being priced in fiat or fiat being volatile when priced in gold?

No, even priced in other commodities, Gold is still volatile (especially on a monthly or yearly basis).

It doesn't matter in what currency or unit of measure something is priced in. If something is volatile it will be in every measure

Dalmar

hero member

Activity: 1092

Merit: 500

Life is short, practice empathy in your life

Quote from: cr1776 on June 22, 2014, 06:57:10 AM

Quote from: Dalmar on June 19, 2014, 01:52:33 PM

Even gold with its huge market cap is still relatively volatile. Bitcoin will always be relatively volatile as long as it isn't used as a widespread unit of account.

Is it really gold that is volatile being priced in fiat or fiat being volatile when priced in gold?

No, even priced in other commodities, Gold is still volatile (especially on a monthly or yearly basis).

Cicero2.0

member

Activity: 98

Merit: 10

★☆★Bitin.io★☆★

When it is back by goods and services it will stabilize. One thing that would help would be to decouple it from the dollar, yen, etc. We need so many satoshi or bits compared to a basket of goods and services to get a true value. As acceptance increases this will come.

ShakyhandsBTCer

sr. member

Activity: 448

Merit: 250

It's Money 2.0| It’s gold for nerds | It's Bitcoin

Quote from: InwardContour on June 22, 2014, 11:45:32 PM

Quote from: IIOII on June 22, 2014, 08:43:02 AM

I'm not sure if market cap is the only relevant factor for price stability. I think equally or even more important is the main use of bitcoin.

I'd argue that the more bitcoin is used for transactions the less volatile it will be. If bitcoin is primarily seen as a commodity it will have higher volatility than if it's primarily used as a transactional currency. With market capitalization in the trillions and primarily commodity properties it will have gold-like volatility which is still substantial but would not impede usability either.

This is 100% correct. It is not so much market cap that affects stability but total transaction volume, both measured by goods/services to bitcoin and by exchange volume.

Once TX volume picks up (from TX of actual trades involving goods/services) then the price of bitcoin should stabilize.

InwardContour

sr. member

Activity: 644

Merit: 260

Quote from: IIOII on June 22, 2014, 08:43:02 AM

I'm not sure if market cap is the only relevant factor for price stability. I think equally or even more important is the main use of bitcoin.

I'd argue that the more bitcoin is used for transactions the less volatile it will be. If bitcoin is primarily seen as a commodity it will have higher volatility than if it's primarily used as a transactional currency. With market capitalization in the trillions and primarily commodity properties it will have gold-like volatility which is still substantial but would not impede usability either.

This is 100% correct. It is not so much market cap that affects stability but total transaction volume, both measured by goods/services to bitcoin and by exchange volume.

Topic: How high a of a market cap would bitcoin need to have to be 'stable'? - page 3. (Read 6187 times)