Ok... I've been a long-term bitcoin bull since I first really researched it in 2011. But you guys with your charts are grasping at air. Humans are natural pattern seekers, so this is all very tempting, but you're drawing conclusions based on a sample-set of 2 (and not to mention while also ignoring the 2011-2013 peak-to-peak of 20 months).
Look at it from a market-cap and global-influence perspective. Something going from a $100M to $1B market cap is going from a pittance to....still a pittance. Thus, there are many dynamics that can cause such a thing to happen. We're probably still in that realm going from $1B to $10B. Ten billion is still small in terms of global finance. There are plenty of *individuals* with higher net worth, and hundreds if not thousands of equities.
But the next order of magnitude up crosses a line. At $100B, there are only a few global equities with higher market-cap, zero individuals, and we're starting to get into the M2 money-supply range of somewhat important nations. Go toward $200-$500B and we're in serious global influence territory. Crossing that line out of "not globally important" is a big deal, and it can't happen easily.
That said, I think we *can* get to $30B-$50B market-cap on largely the same dynamics that have brought us this far. To get above, that, though, bitcoin will have to win some major battles.
Look at it from a market-cap and global-influence perspective. Something going from a $100M to $1B market cap is going from a pittance to....still a pittance. Thus, there are many dynamics that can cause such a thing to happen. We're probably still in that realm going from $1B to $10B. Ten billion is still small in terms of global finance. There are plenty of *individuals* with higher net worth, and hundreds if not thousands of equities.
But the next order of magnitude up crosses a line. At $100B, there are only a few global equities with higher market-cap, zero individuals, and we're starting to get into the M2 money-supply range of somewhat important nations. Go toward $200-$500B and we're in serious global influence territory. Crossing that line out of "not globally important" is a big deal, and it can't happen easily.
That said, I think we *can* get to $30B-$50B market-cap on largely the same dynamics that have brought us this far. To get above, that, though, bitcoin will have to win some major battles.
Great comment, melbustus. Thanks.
Similar to an argument I play out in my head occasionally. 100B (or somewhere around there) crosses into a new territory, imo. Marx' Umschlag von Quantität und Qualität comes to mind (the transition from a difference in quantity to a difference in quality.)
Just to play devil's advocate, I want to say that perhaps market cap might not be the one true indicator of when we move from pittance to globally important.
I serve this with a large helping of salt, but roughly speaking it looks like a n^x increase in price only requires xn in fiat volume. That is to say that if the market cap was to increase exponentially, the fiat needed to support that price only appears to increase geometrically.
This is a loose observation just glancing quickly at price /volume in fiat and necessarily means looking back at gox data, so theres potentially interference, and more than likely a bit of wishful thinking
What it might mean (here's that wishful thinking) is that the move to $10k could still happen without a globally significant amount of fiat backing it, and that it might be a move to $100k that would necessitate the transition to quality.
Of course bear in mind that I'm the frothy mouthed kind of bitcoin nutter that thinks the willy report is long term bullish
Good point. But there are two ways to look at the question "what kind of price increase will be possible assuming we are fundamentally 'the same' as now?".
One way is to look at it causally, what you seem to do, looking at USD volume in relation to XBT/USD. The other way is what I did (and I think melbustus as well): without speculating on the exact cause that would prevent us from reaching the level of the "global players", we assume we won't reach that level until some fundamentals change qualitatively (say: merchant adoption reaches a point where large companies need to report on their XBT turnover vs. their USD turnover... something like that), because the resultant capitalization would be a qualitative change. Circular argument, maybe, but based on experience/intuition, I suppose.
Anyway, I agree with you in that 10k XBT/USD might still be within reach of the "current level" of fundamentals... the (very vaguely defined) global player valuation is closer to 500B than 100B, imo, so 10k per coin at ~10M coins could still be possible.
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roughly speaking it looks like a n^x increase in price only requires xn in fiat volume. That is to say that if the market cap was to increase exponentially, the fiat needed to support that price only appears to increase geometrically.
Sure you mean "geometrically"? A geometric series still undergoes exponential growth. You formula seems to imply linear growth in fiat vs. exponential growth in XBT/USD.
I'm wondering though, how do you get to that formula? It's, well, one of my "pet projects", to find a way to analyze USD volume as a predictor for XBT/USD, but that ratio is not something I personally found yet, and I admit, I'm also a bit skeptical about it. Care to motivate it a bit more?
