Economics question, someone ?

[wec]

"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."

Can someone explaing to me why the btc value will increase when the moneysupply will be neutral ? Shouldn't be the value neutral as well ?

Thanks
wec

[Wusolini]

"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."

Can someone explaing to me why the btc value will increase when the moneysupply will be neutral ? Shouldn't be the value neutral as well ?

Thanks
wec

Tricky question. I think there is no 100% correct answer.
BTC price is given by supply and demand, so even when the supply is down BTC price can still be affected by demand.

As there will be no direct supply and assuming there always will be somebody who never heard of bitcoin, all those newcomers can potentially increase the BTC value if they shows interest in buying them.

[maurya78]

The basic idea is that with a fixed supply, as demand increases in response to say increased adoption as supply cannot increase to meet that higher demand, price has to rise

[wec]

hum, thanks a lot guys, im now enlightened

[shanem]

btc is the largest crypto so btc would be the 1st choice for mass adoption.
Many altcoins are just created for p&d and bitcoin has the best liquidity of all the cryptocoins.

[btcstomper]

It's logical to think that by the time 21 million of coins are mined (2140), if the context allows for it (whoever is alive is living under a more or less stable civilization) the BTC economy will be extremely stable and solid, with no severe price swings, addoption will be massive and 1 BTC will have the purchasing power of a couple million dollars of current USD.

[Pkofet]

With people dying, losing bitcoin wallet and forgetting passwords, the actual amount of bitcoin in circulation will be less and less.
So, if the demand remain unchanged or increases while the supply decreases, the price will go up.

[maurya78]

It all hinges on a massive and sustainable adoption wave driving consistently high demand that the fixed supply cannot address
Big, big ifs. Economic theory cannot really model this as we have never had a deflationary, digital currency

[wec]

It all hinges on a massive and sustainable adoption wave driving consistently high demand that the fixed supply cannot address
Big, big ifs. Economic theory cannot really model this as we have never had a deflationary, digital currency

considering all the answers i think yours is the most accurate one but it was importante to read from you all

Thanks

[DhaniBoy]

bitcoin exchange rate or price depends on market demand and how much bitcoin has been circulating in the market, in accordance with economic laws, more and more demand in the market bitcoin bitcoin then the price will be higher, and vice versa the less demand in the market bitcoin bitcoin then the price would be lower, one more thing that affects the price of bitcoin bitcoin is the availability in the market, the less the amount of bitcoin that exist in the market price of bitcoin will be higher, and vice versa ... 

[Testing123]

It is hard to predict what will happen when block reward drops to 0.
As block reward halves, the bitcoin price may go up or tx fee may go up and affect the adoption.