Well, that's not to say that they won't be $200k 3.5 years from now. :) The price remains mostly speculation atm. But that could be said about a lot of investments. If we are still talking about bitcoin four years on, it's likely that we will be at modest global adoption. It's difficult to see how if even 10% of the folk that have email accounts now have BTC then, the price can't increase substantially. They are crazy numbers, but so is the concept of global adoption.
I am not going to claim that BTC will. I have no idea whether it will or not. I think it would be great if it did, but I think anyone can only speculate at this point. IMHO the best argument for price stabilization of BTC is that the liquidity will increase enough, and that the usage will be broad enough. Currently, there are many individuals that can substantially influence the price with their stake. The BTC 'market cap' might be about $5B, but the daily volume is around $10M. That's comparable in marketcap and volume to a stock like SunEdison, and so is the volitility. Currently trade volume is about 20x transaction volume. That's a stock, not a currency. If the amount traded becomes a smaller amount of the total in circulation, volatility should settle down. That said, even a useful currency like the Euro isn't boring. I tried to find stats on the trade volume of the euro vs. its velocity, but had little success. I'd be curious how it measures up. It would surprise me if the Euro trade volume was 20x it's transaction volume, but who knows. When it comes to the whole inflation vs. deflation shit, I haven't a clue. One would have thought that QED would lead to some inflation... It doesn't seem that Central Banks can turn the knobs that easily. The fact that hyperinflation exists is pretty good evidence of the psychological nature of currency overwhelming the forces of supply and demand. Brazil had a crazy currency experiment that supports that notion. At any rate, I don't think it's evident that BTC is going to be a sovereign currency replacement, so it doesn't necessarily have to meet that bar. People are interested in owning plenty of assets that aren't currencies, and to the extent that bitcoin's utility outweighs BTC's shortcomings as an asset, then people should put it to use. For some reason a lot of people are interested in owning paper vouchers for gold. That seems a low bar to me. There's some crazy interesting shit that is being done with bitcoin that you just can't do with currency. There are decentralized hosting schemes where people that run nodes of a decentralized network get paid out from aggregated BTC to pay for their service. For example, Hubski could be distributed, and if you ran a Hubski node, you would be credited BTC based upon the bandwidth/storage that you contributed. That BTC could come from advertisers, subscriptions, etc., and all the allotment would be automated. You could spin up a Hubski node, and start getting paid within the hour. There also remains the real possibility that if/when BTC becomes integral to commerce/etc., a central authority will step in and fuck with the code in such a way to make it behave like a Central Bank.
So in other words, the more it gets used, the more stable it will become. Definitely an unstable equilibrium, as the more volatile it becomes the less adoption will happen... I gotcha. Wonder if you've read any of John Mauldin. He's big up in macroeconomics and the powers and failures of central banks. I did Endgame and am working through Code Red (the audiobook is awful - it's like read by a 10th grader). I'll warn you - he ain't a fan of BTC.
Interesting. Care to guess on four years from now? I am going to say $30k. Ethereum didn't exist four years ago, and from what I see, it is eating BTC's lunch: https://twitter.com/sassal0x/status/1072248386114412545 although the market doesn't reflect it yet.
The second, third, fourth, fifth, seventh and tenth cryptocurrencies on Coinmarketcap's market capitalization chart are Ethereum or Ethereum sidechains. All together they do not match the market share of Bitcoin, but then there's still 11, 15, 16... the fact that there's more Uniswap tokens out there than Solana (and more Solana than Avalanche... barely) says a lot. The Block sent this out yesterday. "Oh? Oh really? I know Rust, I don't know Cairo... do go on." "I must admit to a blind spot here, I guess, because this was not a rivalry I was aware of..." "Oh."
I don't really consider a price increase to be a good thing. It merely makes it easier for bag holders to pass theirs off to yet greater fools, and makes it clear that bitcoin's use is speculation rather than as facilitating transactions. In other words, the only way to make it kinda work is with a huge markup to buffer the price fluctuations. This sucks for everyone except early adopters
IMO you are focusing too much on bitcoin as a currency, i.e. BTC rather than bitcoin. They are inseparable but very different. The heavy investment interest in bitcoin companies has much more to do with what can be done with bitcoin, rather than the price of BTC. See my reply to kleinbl00 here. The deep interest in bitcoin has to do with the applications it enables. The interest in the BTC currency is important, but its speculative value is the consequence of bitcoin's potential usefulness. I am bullish about the long term price of BTC because I am bullish about the long term utility of bitcoin as a protocol for new applications. I expect the protocol to become widely adopted.
I would have probably made that distinction a year or so ago. However, at this point, I believe that bitcoin has such a first mover advantage and a network effect, that I see little potential that another cryptocurrency will supplant it. The most interesting alternate that I have seen is ethereum, and I got some ether in the presale, but I suspect that it won't win out. As bitcoin's codebase can be altered to adopt advantageous characteristics, and as things like sidechains allow for flexibility beyond bitcoin protocol itself, and as the amount of capital backing bitcoin companies is orders of magnitude higher than all the rest combined, I just don't see it happening. Even the deflationary nature of bitcoin can be changed with just a couple of lines of code. Of course, everyone claims that there will be a fork rebellion in the event of something like that changing, but imagine a future world that depends upon the bitcoin protocol, whereby the codebase is regulated by the UN/WTO/WorldBank or something like it. If every company in the world must use the 'legal blockchain' that that consortium maintains, then people will have little choice but to use that resulting BTC.
How is this different from current affairs?[...] the codebase is regulated by the UN/WTO/WorldBank or something like it. If every company in the world must use the 'legal blockchain' that that consortium maintains, then people will have little choice but to use that resulting BTC.