Bitcoin Forum

There is a lot of speculation that price will rise and rise.  But I was thinking about mass adoption, which many board members obviously want to happen.  Wouldn't there reach some equilibrium point where people aren't willing to pay more than X to get some BTC?  I mean, for mass adoption, BTC does not need to be worth $1 million, any number frankly will work.  And in fact I think the more stable the number the more likely there would be mass adoption.

if adoption increases, price has to increase.

The price will not rise forever. It will rise until there is an equilibrium reached at which point the price will remain roughly stable, with some rise and fall based on the growth of the economy. If you do some calculations about how much money each person in the world holds in bitcoin, and you do some calculations on the velocity of money, you can estimate the total value of all bitcoins which you can divide by the number of bitcoins to get a price (remember to take out those that are lost). Most people who do this sort of calculation end up with a number much higher than the current price, so we say the price must go up.

Price will increase because the price of fiat-currencies will decrease because of inflation.

The purchasing power of 1 BTC will stop growing once adoption reaches a plateau.

Once the supply/demand reaches equilibrium with high volumes (maximum adoption), the price will be finally much more stable. (not expecting to increase anymore)

the hilarious thing is that once this has happened and the price discovery phase is over, the speculators will exit the market in troves. the ones that stay will short, and we will see the first real bear market in bitcoin history, The Great Correction. 8)

--arepo

The Great Correction? With your shades on it seems like you've been waiting for this for a while!

i just hope i live to see the day. for the time being the infinite bullrun has been loads of fun, but i expect that the top of this massive curve will be the biggest bubble yet! it's just exciting in general to think about the future of bitcoin in a real sense... remembering that when i first came here it was a niche project, not a fledgling payment system :P thinking about the future reminds me of just how far we've come in the past two years and it blows my mind! speaking of which, i once had 200 bitcoins (when they were $5 apiece of course). if only i had hodled....

--arepo

Ahhh, the good ole days. I made the exact same purchase as you! Awesome, idk why.

It's that future which is just starting to look and feel like a feasible reality

Right, whatever the natural stable value of Bitcoin is (if there is one)... BTC will almost certainly enter a huge bubble and go way above it's equilibrium value, then crash below, before stabilizing.

Doesn't matter if you really think the end game is $1,000,000 per coin (which I personally doubt, but who knows?).  If the end game is $1,000,000 then it's inevitable that the final bubble will take us well above and then crash well below....  Imagine peaking at $10,000,000, crashing down to $300,000, before finally stabilizing at $1,000,000.

I'm plucking numbers out of the air (and I personally don't believe the numbers will be anywhere near that high) but however bullish you are about the fundamentals, it's pretty much inevitable this will end in a bubble.  The idea of a soft landing, where it keeps going up until it just levels off is, sadly, a fiction.

Of course, you have no idea where you are in the process except with hindsight.  Maybe the end game in $100, and $1,000 is the bubble that preceeds the stable price.  Personally I don't believe that, for all sorts of reasons based on the market and the fundamentals, but who knows?  

Exactly.

A stable price is mostly only needed for it to be reliable for currency exchange and other market-order based products.  Ironically, as soon as this happens this will create increased usage, which will make it go up even more, so prices will increase, making it not seem stable.  But I think currency exchangers won't care if the instability is mostly in an upward direction, obviously.

Really, when most people say we need "stability", they mean lack of big downward spikes.  This won't ever be completely eliminated, but I'm a true believer, I think it's inevitable.

But what happens when merchants who accept bitcoin stop exchanging it for their local fiat and decide to hold (at least not exchange immediately, or portions of revenue are held in btc by company for future expectations). I think this is when bitcoin has the potential to go from $2-3k to $50k+.  My guess is 1.5-2yrs.

Agreed, bitcoin has all the characteristics to turn into a HUGE bubble (and I mean overvalued in the long-term, not just the price oscillations we have seen so far), but if everything works out as we hope it does, we are still very far away from that point. 

not quite sure... i think it will be very difficult to tell, indeed, when the price discovery phase has actually ended. it will simply be a massive bubble (and each new one is bigger and bigger, anyway), that doesn't stabilise back onto trend. ever. this is partly why it's so exciting, because it will be nearly impossible to predict. determining the final market cap for bitcoin given worldwide adoption has always been a particularly masturbatory practice, as you can see from the many threads dedicated to such a task which all yield wildly different results based on the varying initial assumptions.

--arepo