How high a of a market cap would bitcoin need to have to be 'stable'?

[smoothie]

I'd say $1 trillion market cap.

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[cosmicapex]

I would say 100 Billion dollars would keep the price very stable
The reason is that a movement of 1 billion dollars would not move the price much in relative percentages but perhaps a lot in Fiat terms still.

Kind of a tricky question since mining would still be occurring and it depends on how many Bitcoins still remain in circulation not lost stolen etc.
Due to divisibility.

Trillion of dollars change hand in the forex market and none of the currency look stable. Yearly fluctuation for more than 25% for some currencies.

I don't think market cap has any correlation with stability.

It doesn't matter if they don't "look" stable because they're what we compare Bitcoin's to when we talk about Bitcoin being highly volatile.

So if "trillions of dollars changing hands" means we can have BTC down from 5000% yearly change to 25%, then it would be, by comparable standards, stable.

[TheMinex]

Trillion of dollars change hand in the forex market and none of the currency look stable. Yearly fluctuation for more than 25% for some currencies.

I don't think market cap has any correlation with stability.

+1

[Ekaros]

It won't be. Just as word economy isn't stable... And no one is stabilising it either...

[cr1776]

Even gold with its huge market cap is still relatively volatile. Bitcoin will always be relatively volatile as long as it isn't used as a widespread unit of account.

Is it really gold that is volatile being priced in fiat or fiat being volatile when priced in gold?

[zimmah]

Would it take governments deciding to hold bitcoin in their reserves for bitcoin's market cap to reach these heights or not? Or is private capital sufficient to get bitcoin to the 100 billion, 500 billion or 2 trillion dollar market caps mentioned?

private capital is easily sufficient to reach about a trillion.


ask around, how many people actually own bitcoin?

If the amount of bitcoin owners increases by 50 times or so, we'll definitely be at a trillion dollar 'market cap'.

Will it be stable? Probably not.

It won't be stable until it's the main currency.

In fact bitcoin may at some point be more stable than USD and EUR and other fiat itself, but of course it would look unstable.

For example if you would compare Bitcoin to Gold i expect that once the 'market cap' of bitcoin is big enough, the Gold/XBT ratio would not change that much anymore. While the USD/Bitcoin ratio will.

[IIOII]

I'm not sure if market cap is the only relevant factor for price stability. I think equally or even more important is the main use of bitcoin.

I'd argue that the more bitcoin is used for transactions the less volatile it will be. If bitcoin is primarily seen as a commodity it will have higher volatility than if it's primarily used as a transactional currency. With market capitalization in the trillions and primarily commodity properties it will have gold-like volatility which is still substantial but would not impede usability either.

[scryptasicminer]

Even gold with its huge market cap is still relatively volatile. Bitcoin will always be relatively volatile as long as it isn't used as a widespread unit of account.

Is it really gold that is volatile being priced in fiat or fiat being volatile when priced in gold?

This is probably one of the reason currency/bitcoin pair will never be stable.

Also, as technology finally hit its limitation on mining, price of bitcoin need to keep rising to justify the amount of hash rate currently being run. How it finally play out remain to being seen.

[InwardContour]

I'm not sure if market cap is the only relevant factor for price stability. I think equally or even more important is the main use of bitcoin.

I'd argue that the more bitcoin is used for transactions the less volatile it will be. If bitcoin is primarily seen as a commodity it will have higher volatility than if it's primarily used as a transactional currency. With market capitalization in the trillions and primarily commodity properties it will have gold-like volatility which is still substantial but would not impede usability either.

This is 100% correct. It is not so much market cap that affects stability but total transaction volume, both measured by goods/services to bitcoin and by exchange volume.

[ShakyhandsBTCer]

I'm not sure if market cap is the only relevant factor for price stability. I think equally or even more important is the main use of bitcoin.

I'd argue that the more bitcoin is used for transactions the less volatile it will be. If bitcoin is primarily seen as a commodity it will have higher volatility than if it's primarily used as a transactional currency. With market capitalization in the trillions and primarily commodity properties it will have gold-like volatility which is still substantial but would not impede usability either.

This is 100% correct. It is not so much market cap that affects stability but total transaction volume, both measured by goods/services to bitcoin and by exchange volume.

Once TX volume picks up (from TX of actual trades involving goods/services) then the price of bitcoin should stabilize.

[Cicero2.0]

When it is back by goods and services it will stabilize. One thing that would help would be to decouple it from the dollar, yen, etc. We need so many satoshi or bits compared to a basket of goods and services to get a true value. As acceptance increases this will come.

[Dalmar]

Even gold with its huge market cap is still relatively volatile. Bitcoin will always be relatively volatile as long as it isn't used as a widespread unit of account.

Is it really gold that is volatile being priced in fiat or fiat being volatile when priced in gold?

No, even priced in other commodities, Gold is still volatile (especially on a monthly or yearly basis).

[Harley997]

Even gold with its huge market cap is still relatively volatile. Bitcoin will always be relatively volatile as long as it isn't used as a widespread unit of account.

Is it really gold that is volatile being priced in fiat or fiat being volatile when priced in gold?

No, even priced in other commodities, Gold is still volatile (especially on a monthly or yearly basis).

It doesn't matter in what currency or unit of measure something is priced in. If something is volatile it will be in every measure

[DannyElfman]

I'm not sure if market cap is the only relevant factor for price stability. I think equally or even more important is the main use of bitcoin.

I'd argue that the more bitcoin is used for transactions the less volatile it will be. If bitcoin is primarily seen as a commodity it will have higher volatility than if it's primarily used as a transactional currency. With market capitalization in the trillions and primarily commodity properties it will have gold-like volatility which is still substantial but would not impede usability either.

This is 100% correct. It is not so much market cap that affects stability but total transaction volume, both measured by goods/services to bitcoin and by exchange volume.

Once TX volume picks up (from TX of actual trades involving goods/services) then the price of bitcoin should stabilize.

I would say the opposite. I would say that once the price stabilizes then trade volume would increase as people will be less susceptible to losing money between the time they acquire the bitcoin and the time they spend the bitcoin

[ShakyhandsBTCer]

I'm not sure if market cap is the only relevant factor for price stability. I think equally or even more important is the main use of bitcoin.

I'd argue that the more bitcoin is used for transactions the less volatile it will be. If bitcoin is primarily seen as a commodity it will have higher volatility than if it's primarily used as a transactional currency. With market capitalization in the trillions and primarily commodity properties it will have gold-like volatility which is still substantial but would not impede usability either.

This is 100% correct. It is not so much market cap that affects stability but total transaction volume, both measured by goods/services to bitcoin and by exchange volume.

Once TX volume picks up (from TX of actual trades involving goods/services) then the price of bitcoin should stabilize.

I would say the opposite. I would say that once the price stabilizes then trade volume would increase as people will be less susceptible to losing money between the time they acquire the bitcoin and the time they spend the bitcoin

When you have more trades, you will have more people buying/selling bitcoin (and higher volume), when you have more volume of bitcoin being traded it will take more money to move the price then when volume is lower

[Erdogan]

Would it take governments deciding to hold bitcoin in their reserves for bitcoin's market cap to reach these heights or not? Or is private capital sufficient to get bitcoin to the 100 billion, 500 billion or 2 trillion dollar market caps mentioned?

When some country buys another currency for reserves, yes that strengthens the foreign currency.

The only reason to have reserves, is to manipulate (also called stabilize) a local fiat currency. If the fiat currency in question were allowed to float, reserves would not be necessary.

[DannyElfman]

Would it take governments deciding to hold bitcoin in their reserves for bitcoin's market cap to reach these heights or not? Or is private capital sufficient to get bitcoin to the 100 billion, 500 billion or 2 trillion dollar market caps mentioned?

When some country buys another currency for reserves, yes that strengthens the foreign currency.

The only reason to have reserves, is to manipulate (also called stabilize) a local fiat currency. If the fiat currency in question were allowed to float, reserves would not be necessary.

If a country has a trade surplus and nothing to spend the excess currency that is pouring into the country then it will have foreign currency reserves.

[Erdogan]

Would it take governments deciding to hold bitcoin in their reserves for bitcoin's market cap to reach these heights or not? Or is private capital sufficient to get bitcoin to the 100 billion, 500 billion or 2 trillion dollar market caps mentioned?

When some country buys another currency for reserves, yes that strengthens the foreign currency.

The only reason to have reserves, is to manipulate (also called stabilize) a local fiat currency. If the fiat currency in question were allowed to float, reserves would not be necessary.

If a country has a trade surplus and nothing to spend the excess currency that is pouring into the country then it will have foreign currency reserves.

That is not enough, the foreign money has to somehow get into the pockets of the government.

[GangkisKhan]

Given how mining work for bitcoin, I do not think the price will stable.

It has to keep going up so miners can have "profit" in either profit or transaction fee.

[Este Nuno]

Given how mining work for bitcoin, I do not think the price will stable.

It has to keep going up so miners can have "profit" in either profit or transaction fee.

Well, it can still go up and be relatively stable as well.