Inflation and Deflation of Price and Money Supply

[fuer44]

the price inflation and deflation depends on peoples holding it in their wallets i mean not the fishes in the sea am talking about the big whales of bitcoin, and stays increasing by time that's the algorithm of bitcoin, but sometimes we see a small decreasing that because of the demand and such, anyway we can't predict bitcoin scam but make sure that bitcoin never goes down down.

Inflammation and deflamation these are two both opposite things in the sense. For example if you have money in your wallet like 10BTC and the price of bitcoin increased after some times then the money in your pockets is increased it is called inflammation while the opposite of this process is called deflamation

does that mean deflamation can be interpreted as a price reduction? means it can be interpreted also, if the deflamation is the opposite of inflation. if for example inflation is a rising price, and deflamation is a falling price.

[Kyrgyzguy]

This post so cool

[Sidiq SP]

I think inflation is a continuously rising price trend and deflation is the other way around, the link between price and offer with inflation and deflation is vital, inseparable, in the event of jnflation and deflation it will trigger price volatility and supply, so the more we struggling with all this will surely understand that all are connected to one another

[thend1949]

I think inflation is a continuously rising price trend and deflation is the other way around, the link between price and offer with inflation and deflation is vital, inseparable, in the event of jnflation and deflation it will trigger price volatility and supply, so the more we struggling with all this will surely understand that all are connected to one another

Yes that's how bitcoin behaves in a matter of time, also with other cypto currencies in the crypto market as inflation continues to rise. That's why price volatility happens always specially when many people selling their assets, particularly that bitcoin holdings they had. If demand also will increase then we can see the price surges and supply became smaller that's why the price will be getting so expensive. That would be a good time to gain proper understanding behind all of this situations that we had is more like a domino effect.

[tibne]

Another view is that cryptocurrencies increase the money supply and will cause inflation. So dollar will be softer. Then major crypto like Bitcoin will go up against dollar? 

[BrendaGee]

The only way to really manipulate the price would be a mass adoption as a secondary currency. if we can keep pushing the adoption. With a set number of currency to be made, the only main issue to create price is velocity. since this velocity is so high and the inflation rate known. we could expect the price to jump again. the issue is more of a convinence thing.

[Sviatoslav Zvarych]

USD inflation was 1.9% last month.

It will close at FED target 2.5% this year. It means that if you have USD 100.00 under your mattress you now have $97.50 as dollar purchasing power.

[quedex]

Price-Deflation is what you are used to hearing about in Bitcoin. That term is used to describe the prices of goods/services as they decrease, because the value of Bitcoin goes up.

Price-Inflation is the opposite. When prices of goods/services increase because the value of Bitcoin goes down.

So, when dealing with Price-Inflation or Deflation, there is an inverse relationship of price and value, in regard to goods/services and Bitcoin.

Example: As the Bitcoin price goes from $10 to $20, the prices of goods/services goes down from 20BTC to 10BTC. As the Bitcoin price goes from $20 to $10, the prices of goods/services goes from 10BTC to 20BTC!

This works only if treated as a loose analogy or "what would happen if the economy ran on Bitcoin only and everything else was unchanged".
In fact, Bitcoin does not have any meaningful price inflation (or price deflation) since there are no prices that are actually set in BTC. I've yet to see a price even remotely sticky in BTC, everything is indexed to USD or other fiat. Sure, you could measure how much goods you could buy for your coins, but there is no added information in that.

[Danilo23]

someone can give a predict me about the price of bitcoin? going up or down?

[jossiel]

someone can give a predict me about the price of bitcoin? going up or down?

You can go at the Speculation board there are so many predictions about bitcoin if it's going to be up or down.

There are many factors that are affecting the price and supply of bitcoin so speculations there mostly are coming from the trading experts.

Also there's a specific thread Wall Observer BTC/USD - Bitcoin price movement tracking & discussion there where you can follow that is very active from time to time.

[FLUZFLUZGLOBAL]

Inflation is bitcoin supply is quite high, and will increase for the next years to come. Supply of money is also a matter of velocity, or speed, of money flows. Keep that in mind.

[wywialm]

Inflation is bitcoin supply is quite high, and will increase for the next years to come. Supply of money is also a matter of velocity, or speed, of money flows. Keep that in mind.

Now that is a magnificently bad explanation :-)

Currently the growth of Bitcoin supply is a little less than 4% and will decrease for the next years to come. Supply of money is deterministic and not a matter of velocity, or speed, of money flows. Keep that in mind.

[GreenCoin22]

I was wondering about MoneySupply-Deflation. So as an example when an altcoin burns it`s coins that are not in the circulation their value increases immediately by 30-50 % . Is it the reason of the deflation or people think that it will affect the price and there is a tremendous volume going up which automatically increases the value of the coin. So I wonder when there is such an announcement what should be considered .shall we invest or not ?

[futile-resistance]

someone can give a predict me about the price of bitcoin? going up or down?

Yes I could help you in this regard .If you are asking about the future of the Bitcoins then I do not fear declaring the fact that the price of the Bitcoins is obviously going to rise the in the upcoming year as it is being used at the greatest rate ever. People's confidence in use of digital currencies has increased because of sustainability and reliability it offers to its users. If you scroll through the Internet then you might find the price of Bitcoins having increased to a much preferable level as compared to near past.

[terrific]

Inflation is bitcoin supply is quite high, and will increase for the next years to come.

Bitcoin's supply will decrease yes and I'll agree with what you said about inflation on it. But have you heard about the halving? It's been happening every 4 years with bitcoin and there's no way for it to increase for next years to come. It's supply will never increase but the current bitcoin in the market will be increasing and adding more because of it.

Supply of money is also a matter of velocity, or speed, of money flows. Keep that in mind.

I can't comprehend about the supply of money with velocity and speed as I know it's only for the things that moves but okay let's consider it with the "flow" and "movement" of money in the ecosystem.

[Artyom1316]

Inflation is bitcoin supply is quite high, and will increase for the next years to come.

Bitcoin's supply will decrease yes and I'll agree with what you said about inflation on it. But have you heard about the halving? It's been happening every 4 years with bitcoin and there's no way for it to increase for next years to come. It's supply will never increase but the current bitcoin in the market will be increasing and adding more because of it.

Supply of money is also a matter of velocity, or speed, of money flows. Keep that in mind.

I can't comprehend about the supply of money with velocity and speed as I know it's only for the things that moves but okay let's consider it with the "flow" and "movement" of money in the ecosystem.

цeнa pocти бyдeт , нo быки мoгy этy цeнy oчeнь cильнo oпycтить , ecли кoнeчнo зaxoтят ) a oни нe зaxoтят)))

[FLUZFLUZGLOBAL]

Value of a store of value  depends of various elements
- Aceptance
- Good and services which can de acquired
- expectations about future prices

[galvan jean]

An area dedicated to discussing the differences of these two terms and the theories supporting them.

I'm looking forward to an in-depth discussion on the subject! I've noticed that confusion between the two seems to come up quite a bit on the forum, and thought it may be reasonable to dedicate a thread on the matter.

Pulled from a discussion in Wall Observer


Price-Deflation is what you are used to hearing about in Bitcoin. That term is used to describe the prices of goods/services as they decrease, because the value of Bitcoin goes up.

Price-Inflation is the opposite. When prices of goods/services increase because the value of Bitcoin goes down.

So, when dealing with Price-Inflation or Deflation, there is an inverse relationship of price and value, in regard to goods/services and Bitcoin.

Example: As the Bitcoin price goes from $10 to $20, the prices of goods/services goes down from 20BTC to 10BTC. As the Bitcoin price goes from $20 to $10, the prices of goods/services goes from 10BTC to 20BTC!

Why does the price of Bitcoin go up and down? The price of BTC goes up and down based on the exchange rate, or market price, which is set by buyers and sellers, or traders. They directly trade the Bitcoin currency with all sorts of other currency, and even some with gold; the most popular being the USD (US dollar). They set the price when executing orders to buy or sell. I will get into the actual reason of why the price fluctuates in the last section.


Now that we've gone over PRICE Inflation and Deflation (which honestly, to me, is a term made popular by Keynesian's to hide the real facts, as price inflation/deflation is simply the market exchange rate, reflective of the money supply into a currency from itself and other currencies), let's go over the REAL inflation/deflation of a currency (otherwise known by many as Monetary Inflation).

MoneySupply-Inflation is when the value of Bitcoin decreases when the total supply of Bitcoin increases. In our current state, this is at a generation rate of 25 BTC every 10 minutes.

MoneySupply-Deflation will essentially never occur. It is when the value of Bitcoin increases when the total supply of Bitcoin decreases. This may happen, say, when someone loses their private key and all the BTC associated with it are lost. This effectively "makes the rest of us richer". That being said, there is a SET DECREASE in the generation rate of BTC, so you have sort of a "deflationary effect" in the value, as long as more exchange occurs for BTC at a rate which is faster than that set generation rate.

When all 21 million coins are produced, the MoneySupply will be neutral, and the value will continue to increase (prices will decrease, consequently), as long as people continue to exchange in BTC.

This leads me to the last section.


What determines the PRICE of Bitcoin? The VALUE of Bitcoin at a particular moment.

What determines the VALUE of Bitcoin? The SUPPLY and DEMAND of Bitcoin in the economy.

What determines the SUPPLY of Bitcoin? Currently, the MoneySupply-Inflation rate of 25 BTC every 10 minutes, and traders willing to SELL Bitcoin to BUYERS in exchange for other supplies of money (currencies).

What determines the DEMAND of Bitcoin? Traders willing to BUY Bitcoin from SELLERS in exchange for other currencies.


Therefore: BUYERS, SELLERS, and MONEYSUPPLY-INFLATION (miners) determine the VALUE of Bitcoin, which determines the PRICE of BTC as BUYERS and SELLERS trade based on that VALUE (or supply and demand) of Bitcoin.


We don't exactly know the totality of the supply and demand. Sure, we could try and aggregate data from all the exchanges, but we will never be accurate as there are exchanges which can not be accounted for (OTC). The cool thing is that we DO know the MoneySupply rate, and we DO know the exchange rate. From this, we can determine a real value of Bitcoin when simply multiplying the two factors; a sort of inflation-adjusted view of the currency.

Effectively, the quantitative analysis of supply and demand is really what the currency exchange traders attempt to accurately determine which is conveyed through buying and selling of Bitcoin, setting a VALUE via the PRICED exchange rate of the currency. On a side note, most of the big Market Makers (FX Traders) use this price movement as a way to make a profitable living, as well. Especially when price fluctuations are a consequence of hype or fear (bubbles, cliffs), not factual supply/demand data, and are wildly out of the real price range.

Thus, if you analyze the proper macroeconomic data in an attempt to forecast future DEMAND for more Bitcoin (price increase), you will realize some very interesting things, and have a more accurate picture of where the price is going...

Happy trading!

Therefore: BUYERS, SELLERS, and MONEYSUPPLY-INFLATION (miners) determine the VALUE of Bitcoin, which determines the PRICE of BTC as BUYERS and SELLERS trade based on that VALUE (or supply and demand) of Bitcoin.


We don't exactly know the totality of the supply and demand. Sure, we could try and aggregate data from all the exchanges, but we will never be accurate as there are exchanges which can not be accounted for (OTC). The cool thing is that we DO know the MoneySupply rate, and we DO know the exchange rate. From this, we can determine a real value of Bitcoin when simply multiplying the two factors; a sort of inflation-adjusted view of the currency.

Effectively, the quantitative analysis of supply and demand is really what the currency exchange traders attempt to accurately determine which is conveyed through buying and selling of Bitcoin, setting a VALUE via the PRICED exchange rate of the currency.

[batang_bitcoin]

if the price of bitcoin is increases and the supply of demand is also increase. Is there any possibility that the price of goods will also increase?

When demand will increases the price of it results to increase too. The price of goods will also increase depending on it's demand, that's how the law of supply and demand works. But even if the price of bitcoin increases but those goods aren't getting total high demand so that will not work, it will remain cheap. Btw, what goods are you preferring to?

[ShadesSoapy]

Money is an abstraction accustomed to negotiate financial obligations.  Information and cash are bodily representations of that abstraction irrespective if they're made from gold or document.  The only reason gold was utilized because the materials of preference is it experienced the desirable properties.