Increasing Bitcoin Market Capitalization, when does it affect real economy?

cipherer

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Quote from: cellard on May 06, 2017, 09:47:44 AM

Quote from: cipherer on May 05, 2017, 01:39:48 PM

The market value of Bitcoin is over 20 billion EUR. This is huge increase but it’s stil insignificant in relation tot he total money supply (M3 according tot ECB). Is there an opinion in the community about the influence of increasing market capitalization (lets’s say over a quadrillion) on currency markets, real economy etc. ?

What we have seen is just a drop in the ocean of potential growth. The amount of fiat sitting on useless stocks, derivatives and other nonsense assets is going to eventually come to the capital B blockchain (and some will go to alts too of course, but BTC will remain number one). I love this pic that really shows how much potential we have to keep going up:

Very impressive, it shows the potential, but also makes modest!

webtricks

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Presently the part of global economy using Bitcoin is negligible. It is around 1 in 1000 persons. In such scenario we shouldn't expect that Bitcoin could have great impact on economy. However, Bitcoin has invincible potential. As mentioned in above picture by "cellard", bitcoin is presently just a point in total economy of the world. But as its use is growing constantly, market capitalization of Bitcoin gonna break its 2013 record soon and will multiply itself to 10 times by 2020, for sure.

cellard

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Quote from: cipherer on May 05, 2017, 01:39:48 PM

The market value of Bitcoin is over 20 billion EUR. This is huge increase but it’s stil insignificant in relation tot he total money supply (M3 according tot ECB). Is there an opinion in the community about the influence of increasing market capitalization (lets’s say over a quadrillion) on currency markets, real economy etc. ?

What we have seen is just a drop in the ocean of potential growth. The amount of fiat sitting on useless stocks, derivatives and other nonsense assets is going to eventually come to the capital B blockchain (and some will go to alts too of course, but BTC will remain number one). I love this pic that really shows how much potential we have to keep going up:

Nagadota

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Quote from: digaran on May 06, 2017, 12:57:17 AM

How would you do that you genius? market cap is not something you and I or any individual could manipulate but rather the whole community and market decide what price should a currency have, now if you try to accumulate and buy off all the 16.3M Bitcoins, guess what will happen to market cap? it will increase 1M%.
In current situation Bitcoin is not ready to play on an international scale because 10 minutes blocks with 1MB tells us so.
Also it already has effected the "real economy" being digital currency doesn't necessarily mean it's not real.

That's incorrect.

Anyone can manipulate the market cap. I could go on an exchange and give a mate some money. I sell enough Bitcoin to fill the buy orders and then get the mate to buy some at a super low price. Boom, the market cap is down by billions according to that exchange. In the case of altcoins with lower liquidity, it takes nearly no work at all. A few thousand dollars can push the market cap up millions.

Market caps for digital currencies are stupid. All we have for fiat is how much that exists. For cryptocurrencies it should just be the supply and the price.

olubams

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Quote from: cipherer on May 05, 2017, 01:39:48 PM

The market value of Bitcoin is over 20 billion EUR. This is huge increase but it’s stil insignificant in relation tot he total money supply (M3 according tot ECB). Is there an opinion in the community about the influence of increasing market capitalization (lets’s say over a quadrillion) on currency markets, real economy etc. ?

Its true that its beginning to call for concern because of the volume as at now and even converting that to dollars will even give additional increase. However, the amount is still low compared to what will really make a difference and even come to think of it, this amount is not in the space, its still hovering within the economy which is one way or the other building it. And also, dont forget that the capitalization you have there belongs to the whole population involved from different parts of the world. I am sure if that figure is for just one country, then the right attention would have been gotten.

digaran

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How would you do that you genius? market cap is not something you and I or any individual could manipulate but rather the whole community and market decide what price should a currency have, now if you try to accumulate and buy off all the 16.3M Bitcoins, guess what will happen to market cap? it will increase 1M%.
In current situation Bitcoin is not ready to play on an international scale because 10 minutes blocks with 1MB tells us so.
Also it already has effected the "real economy" being digital currency doesn't necessarily mean it's not real.

CraigWrightBTC

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I don't know increasing bitcoin market capitalization it affect real economy
because it is needs valid data to take opinions,
in my opinions increasing bitcoin market capitalization is just speculation from all of comunity bitcoin
(traders, investors and other people) because bitcoin is new revolution of currency in internet.

deisik

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Quote from: Hydrogen on May 05, 2017, 06:02:48 PM

I know some say market cap is irrelevent.

Then I wonder if market capitalization can be compared to a countries GDP.

To those who say crypto market cap is irrelevent, does it mean the GDP of a country is also irrelevent?

This isn't a loaded question btw. It is documented that china and other countries take measures to artificially inflate their GDP higher than it is in reality by constructing "ghost cities" and construction projects which are overestimated in value.

There could be a valid argument that says GDP isn't a completely relvent statistic. Although I'm not certain that same argument translates well to market cap in crypto currencies

In short, GDP is basically a sum, while market cap is a multiplication

And it might be a loaded question but I'd rather think that it is mere incompetence. GDP is a sum of actually produced goods and services offered (in monetary terms) while market cap is a multiplication of the total number of coins by the price of only some of them. Mathematically, GDP = a₁×p₁+a₂×p₂+...+a_n×p_n, and MC = (a₁+a₂...+a_n)×p_1,2,3.... Market cap is like GDP calculated by taking the most expensive good or service multiplied by total number of all goods produced or volume of services offered. The fact that countries doctor their GDP reports doesn't take anything from the concept of GDP as such, while the concept of market cap is misleading and deceiving in and of itself. That has been explained numerous times

Yuhee

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Quote from: flower1024 on May 05, 2017, 11:51:39 PM

Quote from: RoommateAgreement on May 05, 2017, 11:31:34 PM

these numbers although they seem big are still too small. but it is growing and will continue to do so as new coins are created and price is heading up. and it really doesn't have that much of an effect on the real economy when you think about it. again because bitcoin is still too small to have such an effect there are a lot of other huge markets with a much bigger market cap than bitcoin out there.

Quote from: pitham1 on May 05, 2017, 09:00:59 PM

Quote from: cipherer on May 05, 2017, 01:39:48 PM

The market value of Bitcoin is over 20 billion EUR. This is huge increase but it’s stil insignificant in relation tot he total money supply (M3 according tot ECB). Is there an opinion in the community about the influence of increasing market capitalization (lets’s say over a quadrillion) on currency markets, real economy etc. ?

Forget total money supply, it is insignificant in comparison to other asset classes. There are many companies whose valuation exceed EUR 20 Bn. So Bitcoin is still in its infancy. I don't think it has a discernible effect on the real economy.

Yes, bitcoin current market price is very less compared to other currency markets in the world. But even it goes very high also it may not affect on real economy because no governments are considered bitcoins as a real money. So it will not impact much on any countries or world economy. If more and more real businesses start accepting bitcoins then its prices will grow and its market capitalization will go higher but still, I don't think it will affect on any countries economy.

I think there will be a time that govenrments will hire cryptographers just to adopt the currencies. Cause if the government will directly impose rules against btc then a lot of businessmen would take chance and invest in btc. Because as of today millionaires are taking there business in bitcoins or altcoins. this may help economically in the business world but states could get bankrupt if they would make no adjustments in their investments.

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Quote from: RoommateAgreement on May 05, 2017, 11:31:34 PM

these numbers although they seem big are still too small. but it is growing and will continue to do so as new coins are created and price is heading up. and it really doesn't have that much of an effect on the real economy when you think about it. again because bitcoin is still too small to have such an effect there are a lot of other huge markets with a much bigger market cap than bitcoin out there.

Quote from: pitham1 on May 05, 2017, 09:00:59 PM

Quote from: cipherer on May 05, 2017, 01:39:48 PM

The market value of Bitcoin is over 20 billion EUR. This is huge increase but it’s stil insignificant in relation tot he total money supply (M3 according tot ECB). Is there an opinion in the community about the influence of increasing market capitalization (lets’s say over a quadrillion) on currency markets, real economy etc. ?

Forget total money supply, it is insignificant in comparison to other asset classes. There are many companies whose valuation exceed EUR 20 Bn. So Bitcoin is still in its infancy. I don't think it has a discernible effect on the real economy.

Yes, bitcoin current market price is very less compared to other currency markets in the world. But even it goes very high also it may not affect on real economy because no governments are considered bitcoins as a real money. So it will not impact much on any countries or world economy. If more and more real businesses start accepting bitcoins then its prices will grow and its market capitalization will go higher but still, I don't think it will affect on any countries economy.

RoommateAgreement

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these numbers although they seem big are still too small. but it is growing and will continue to do so as new coins are created and price is heading up. and it really doesn't have that much of an effect on the real economy when you think about it. again because bitcoin is still too small to have such an effect there are a lot of other huge markets with a much bigger market cap than bitcoin out there.

AjithBtc

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The growth doesn't gonna affect the real economy. By this price rise we have crossed $42 billion market capital. Real economy always has an inflow in the currency through the digital currency through different forms. So this will not affect the economy. People because of the decreasing use of banks say that the economy gets affected which is not true.

pitham1

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Quote from: cipherer on May 05, 2017, 01:39:48 PM

The market value of Bitcoin is over 20 billion EUR. This is huge increase but it’s stil insignificant in relation tot he total money supply (M3 according tot ECB). Is there an opinion in the community about the influence of increasing market capitalization (lets’s say over a quadrillion) on currency markets, real economy etc. ?

Forget total money supply, it is insignificant in comparison to other asset classes. There are many companies whose valuation exceed EUR 20 Bn. So Bitcoin is still in its infancy. I don't think it has a discernible effect on the real economy.

Sled

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The increase for the bitcoin market capitalization can really affect the real economy because if the increase will continue and get a bigger volume than now then the people around the world will be attracted to the cryptocurrencies not only in bitcoin but also to those cryptocurrencies that are in the top right now. The increasing market capitalization can overcome the current big markets and that is how it can affect the economy.

Hydrogen

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I know some say market cap is irrelevent.

Then I wonder if market capitalization can be compared to a countries GDP.

To those who say crypto market cap is irrelevent, does it mean the GDP of a country is also irrelevent?

This isn't a loaded question btw. It is documented that china and other countries take measures to artificially inflate their GDP higher than it is in reality by constructing "ghost cities" and construction projects which are overestimated in value.

There could be a valid argument that says GDP isn't a completely relvent statistic. Although I'm not certain that same argument translates well to market cap in crypto currencies.

Scott J

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I can't speak for Bitcoin, but cryptocurrencies in general surely have a bright future in terms of market cap.

When we the stock market crash and a massive recession, the speed in which money flows in will increase.

hankyulpark

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There is a lot of room to grow yet. Even if the BTC worth goes to ~10.000, we are talking about 200 billion. When we talk about BTC as a token of value, the money (fiat currency) only change hands, it doesn't multiply or is created (poured into the economy).

cipherer

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The market value of Bitcoin is over 20 billion EUR. This is huge increase but it’s stil insignificant in relation tot he total money supply (M3 according tot ECB). Is there an opinion in the community about the influence of increasing market capitalization (lets’s say over a quadrillion) on currency markets, real economy etc. ?

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