So if the US economy has to print more $$$ to deal with this fiscal cliff I've been reading about in the news will the inflation of the USD cause an increase in BTC price? Or are BTCs relatively pegged to USD?
Not saying the FED will stop printing anytime soon, but are you implying that since the US gov will increase tax revenue, they'll have to borrow more ? Sound logical to you ?
And yes, there's some (inverse) correlation between USD and BTC, but clearly USD value won't be the reason why BTC will go to the moon (ultimately)
The value of
BTC will stay roughly equal. Just like Gold. Back in the day, a gold coin would get you a nice toga, some sandals, and a high-quality bag to put your stuff in. Nowadays, selling a gold piece will net you enough cash for a nice suit, quality shoes, and a briefcase. Don't confuse the number after the $ for a value. It's a price. As the supply of the dollar skyrockets, the price of
BTC, denominated in dollars will necessarily rise.
As has been noted, the only way for
BTC value to rise is if there's greater demand.
His point was the fiscal cliff involves tax increases and spending cuts. There is nothing in the "fiscal cliff" which would result in increased printing. The FED may (continue to) increase printing but that has nothing to do with the fiscal cliff.
Thanks D&T, you got my point.
And regarding BTC value, yep I think it'll go up (and I know the difference between price and value).
At the moment, most people don't know about BTC, so to them we could say that the value they attach to BTC is null. Still a lot of people don't understand it, thus they think it's a bad idea, and that their value is also null. With time (hopefully), more and more people will discover BTC and understand it, find it valuable, thus to them, the value they attach to it will increase.
Now imagine a kind of "global" value, ie the market value. This is the one which is reflected in the price. This is a function of the opinion of every actor in "The Market". This is not a constant, and it's increasing.
The fact that gold's value appear to be nearly constant just mean that it had time to converge (ie roughly everybody knows it, and their opinion on it's value is kinda constant). But "nearly constant" is an overreach. For example, gold's price went up 5 folds in the last 10 years. Fortunately it doesn't mean that USD value went down 80% in the same timeperiod. Everything is not about the dollar. It's about the value of everything compared to the value of everything else.
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