How high a of a market cap would bitcoin need to have to be 'stable'? - page 4.

scryptasicminer

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Quote from: cr1776 on June 22, 2014, 05:57:10 AM

Quote from: Dalmar on June 19, 2014, 12:52:33 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?

This is probably one of the reason currency/bitcoin pair will never be stable.

Also, as technology finally hit its limitation on mining, price of bitcoin need to keep rising to justify the amount of hash rate currently being run. How it finally play out remain to being seen.

IIOII

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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.

zimmah

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Quote from: Este Nuno on June 19, 2014, 12:22:21 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?

private capital is easily sufficient to reach about a trillion.

ask around, how many people actually own bitcoin?

If the amount of bitcoin owners increases by 50 times or so, we'll definitely be at a trillion dollar 'market cap'.

Will it be stable? Probably not.

It won't be stable until it's the main currency.

In fact bitcoin may at some point be more stable than USD and EUR and other fiat itself, but of course it would look unstable.

For example if you would compare Bitcoin to Gold i expect that once the 'market cap' of bitcoin is big enough, the Gold/XBT ratio would not change that much anymore. While the USD/Bitcoin ratio will.

cr1776

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Quote from: Dalmar on June 19, 2014, 12:52:33 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?

Ekaros

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It won't be. Just as word economy isn't stable... And no one is stabilising it either...

TheMinex

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Quote from: scryptasicminer on June 21, 2014, 06:03:15 PM

Trillion of dollars change hand in the forex market and none of the currency look stable. Yearly fluctuation for more than 25% for some currencies.

I don't think market cap has any correlation with stability.

+1

cosmicapex

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Quote from: scryptasicminer on June 21, 2014, 06:03:15 PM

Quote from: Swordsoffreedom on June 21, 2014, 05:31:09 PM

I would say 100 Billion dollars would keep the price very stable
The reason is that a movement of 1 billion dollars would not move the price much in relative percentages but perhaps a lot in Fiat terms still.

Kind of a tricky question since mining would still be occurring and it depends on how many Bitcoins still remain in circulation not lost stolen etc.
Due to divisibility.

Trillion of dollars change hand in the forex market and none of the currency look stable. Yearly fluctuation for more than 25% for some currencies.

I don't think market cap has any correlation with stability.

It doesn't matter if they don't "look" stable because they're what we compare Bitcoin's to when we talk about Bitcoin being highly volatile.

So if "trillions of dollars changing hands" means we can have BTC down from 5000% yearly change to 25%, then it would be, by comparable standards, stable.

smoothie

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I'd say $1 trillion market cap.

scryptasicminer

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Quote from: Swordsoffreedom on June 21, 2014, 05:31:09 PM

I would say 100 Billion dollars would keep the price very stable
The reason is that a movement of 1 billion dollars would not move the price much in relative percentages but perhaps a lot in Fiat terms still.

Kind of a tricky question since mining would still be occurring and it depends on how many Bitcoins still remain in circulation not lost stolen etc.
Due to divisibility.

Trillion of dollars change hand in the forex market and none of the currency look stable. Yearly fluctuation for more than 25% for some currencies.

I don't think market cap has any correlation with stability.

Swordsoffreedom

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I would say 100 Billion dollars would keep the price very stable
The reason is that a movement of 1 billion dollars would not move the price much in relative percentages but perhaps a lot in Fiat terms still.

Kind of a tricky question since mining would still be occurring and it depends on how many Bitcoins still remain in circulation not lost stolen etc.
Due to divisibility.

Este Nuno

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amarha

Quote from: Harley997 on June 21, 2014, 02:56:04 PM

Quote from: Este Nuno on June 19, 2014, 03:59:27 PM

Quote from: GangkisKhan on June 19, 2014, 01:52:54 PM

Quote from: ljudotina on June 19, 2014, 01:37:09 PM

Quote from: MICRO on June 19, 2014, 01:35:43 PM

Quote from: ljudotina on June 19, 2014, 01:28:07 PM

Quote from: Dalmar on June 19, 2014, 12:52:33 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.

If it gets widespread enough, it will replace fiat which will make it basicly 100% stable. Noone will ever ask: "how much dollars or euro is 1 btc worh"? Answer would be: "What is dollar or euro?"

Hehe. Pretty optimistic post . I dont think we will get there anytime soon . Maybe in like 50 years or so Cheesy

Well of course. IT can burn right now down to 0 because of some unknown bug, or it can liv eon and take over fiat. It's just one of possibilities. What is for sure is that higher it goes, more stable it will get.

Higher market cap doesn't mean stability. As pointed out by various posters, gold has trillion dollar market cap and it is no where near stable.

No, but there is a correlation of stability with market cap. As it takes more money to move the market the higher you go.

This is true. However it will be exaggerated be the fact as to how concentrated bitcoin holdings are. As the market cap get bigger, large holders of bitcoin (especially early adapters who CPU mined several blocks per day) would have a greater incentive to sell off part of their bitcoin holdings. This would cause large swings in prices.

Yeah, that's true.

And then there is always the threat that Satoshi could come back one day and decide to let loose one million coins on the market Tongue

Harley997

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Quote from: Este Nuno on June 19, 2014, 03:59:27 PM

Quote from: GangkisKhan on June 19, 2014, 01:52:54 PM

Quote from: ljudotina on June 19, 2014, 01:37:09 PM

Quote from: MICRO on June 19, 2014, 01:35:43 PM

Quote from: ljudotina on June 19, 2014, 01:28:07 PM

Quote from: Dalmar on June 19, 2014, 12:52:33 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.

If it gets widespread enough, it will replace fiat which will make it basicly 100% stable. Noone will ever ask: "how much dollars or euro is 1 btc worh"? Answer would be: "What is dollar or euro?"

Hehe. Pretty optimistic post . I dont think we will get there anytime soon . Maybe in like 50 years or so Cheesy

Well of course. IT can burn right now down to 0 because of some unknown bug, or it can liv eon and take over fiat. It's just one of possibilities. What is for sure is that higher it goes, more stable it will get.

Higher market cap doesn't mean stability. As pointed out by various posters, gold has trillion dollar market cap and it is no where near stable.

No, but there is a correlation of stability with market cap. As it takes more money to move the market the higher you go.

This is true. However it will be exaggerated be the fact as to how concentrated bitcoin holdings are. As the market cap get bigger, large holders of bitcoin (especially early adapters who CPU mined several blocks per day) would have a greater incentive to sell off part of their bitcoin holdings. This would cause large swings in prices.

Este Nuno

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amarha

Quote from: GangkisKhan on June 19, 2014, 01:52:54 PM

Quote from: ljudotina on June 19, 2014, 01:37:09 PM

Quote from: MICRO on June 19, 2014, 01:35:43 PM

Quote from: ljudotina on June 19, 2014, 01:28:07 PM

Quote from: Dalmar on June 19, 2014, 12:52:33 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.

If it gets widespread enough, it will replace fiat which will make it basicly 100% stable. Noone will ever ask: "how much dollars or euro is 1 btc worh"? Answer would be: "What is dollar or euro?"

Hehe. Pretty optimistic post . I dont think we will get there anytime soon . Maybe in like 50 years or so Cheesy

Well of course. IT can burn right now down to 0 because of some unknown bug, or it can liv eon and take over fiat. It's just one of possibilities. What is for sure is that higher it goes, more stable it will get.

Higher market cap doesn't mean stability. As pointed out by various posters, gold has trillion dollar market cap and it is no where near stable.

No, but there is a correlation of stability with market cap. As it takes more money to move the market the higher you go.

beatljuice

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As big as gold is, my guess is the bitcoin is currently used as a currency in a greater number of transactions than gold (number of transaction, not value transacted). When a large number of people are using it every day I think that will stabilize it more than market cap. People will just expect their dozen eggs to cost about 200 satoshi when they go to the market. Might be 220 satoshi at Safeway and 199 satoshi at WinCo but that expectation will stabilize it a lot.

GangkisKhan

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Quote from: ljudotina on June 19, 2014, 01:37:09 PM

Quote from: MICRO on June 19, 2014, 01:35:43 PM

Quote from: ljudotina on June 19, 2014, 01:28:07 PM

Quote from: Dalmar on June 19, 2014, 12:52:33 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.

If it gets widespread enough, it will replace fiat which will make it basicly 100% stable. Noone will ever ask: "how much dollars or euro is 1 btc worh"? Answer would be: "What is dollar or euro?"

Hehe. Pretty optimistic post . I dont think we will get there anytime soon . Maybe in like 50 years or so Cheesy

Well of course. IT can burn right now down to 0 because of some unknown bug, or it can liv eon and take over fiat. It's just one of possibilities. What is for sure is that higher it goes, more stable it will get.

Higher market cap doesn't mean stability. As pointed out by various posters, gold has trillion dollar market cap and it is no where near stable.

Este Nuno

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amarha

Quote from: ljudotina on June 19, 2014, 01:28:07 PM

Quote from: Dalmar on June 19, 2014, 12:52:33 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.

If it gets widespread enough, it will replace fiat which will make it basicly 100% stable. Noone will ever ask: "how much dollars or euro is 1 btc worh"? Answer would be: "What is dollar or euro?"

Even if it does replace the dollar or euro it will still be compared to other things like gold, oil, other cryptocurrencies. Maybe someone will make a stable crypto backed by gold or something like that if bitcoin is too volatile.

ljudotina

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Quote from: MICRO on June 19, 2014, 01:35:43 PM

Quote from: ljudotina on June 19, 2014, 01:28:07 PM

Quote from: Dalmar on June 19, 2014, 12:52:33 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.

If it gets widespread enough, it will replace fiat which will make it basicly 100% stable. Noone will ever ask: "how much dollars or euro is 1 btc worh"? Answer would be: "What is dollar or euro?"

Hehe. Pretty optimistic post . I dont think we will get there anytime soon . Maybe in like 50 years or so Cheesy

Well of course. IT can burn right now down to 0 because of some unknown bug, or it can liv eon and take over fiat. It's just one of possibilities. What is for sure is that higher it goes, more stable it will get.

MICRO

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Quote from: ljudotina on June 19, 2014, 01:28:07 PM

Quote from: Dalmar on June 19, 2014, 12:52:33 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.

If it gets widespread enough, it will replace fiat which will make it basicly 100% stable. Noone will ever ask: "how much dollars or euro is 1 btc worh"? Answer would be: "What is dollar or euro?"

Hehe. Pretty optimistic post . I dont think we will get there anytime soon . Maybe in like 50 years or so Cheesy

ljudotina

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Quote from: Dalmar on June 19, 2014, 12:52:33 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.

If it gets widespread enough, it will replace fiat which will make it basicly 100% stable. Noone will ever ask: "how much dollars or euro is 1 btc worh"? Answer would be: "What is dollar or euro?"

Este Nuno

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amarha

Quote from: Dalmar on June 19, 2014, 12:52:33 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.

That's what worries me too. Specifically the fact that gold, despite it's 'large' market cap is still unacceptably volatile to used as a currency.

What is interesting though is that gold was much less volatile when US dollars were backed by gold.

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