Financial Markets Around World
- Thread starter 4Runner
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What do you think of Bitcoin and the cryptocurrency market? The United States seems to be betting on the future world of digital assets, vigorously promoting the US dollar stablecoin to poor countries. Some people say that the widespread use of stablecoins in the future can make up for the gap in US Treasury bonds to a certain extent.
And now more and more institutions regard Bitcoin as a kind of digital gold rather than a purely hyped tulip. If Bitcoin reaches 50% of the market value of gold in the future, then Bitcoin can rise to more than $600,000 per coin. With the official support of the United States for cryptocurrency, Hong Kong, China, has begun to support stablecoins, Pakistan and some third world countries have begun to support cryptocurrency, and the entire cryptocurrency market seems to be really becoming like a giant capital reservoir.
Do you think Bitcoin can still reach $500,000 or even more than $1 million per coin in the future?
And now more and more institutions regard Bitcoin as a kind of digital gold rather than a purely hyped tulip. If Bitcoin reaches 50% of the market value of gold in the future, then Bitcoin can rise to more than $600,000 per coin. With the official support of the United States for cryptocurrency, Hong Kong, China, has begun to support stablecoins, Pakistan and some third world countries have begun to support cryptocurrency, and the entire cryptocurrency market seems to be really becoming like a giant capital reservoir.
Do you think Bitcoin can still reach $500,000 or even more than $1 million per coin in the future?
I don't know enough about cryptocurrency, but I wonder about the following:
Gold is physical asset, USD is backed by the US Govt, what is behind bitcoin? What is the inherent value in it?
We see memecoins rise in value and subsequently become totally worthless, why?
Stablecoins are stable in name only, we don't actually know if the organizations behind them are actually holding the requisite assets. Terra called itself a "stablecoin", where is it now?
Crypto is still not able to be traded freely on well regulated markets (FTX comes to mind).
Crypto is still not really a usable medium of exchange.
The power required by bitcoin for 1 transaction is equivalent to 100,000 Visa transactions, there is simply not enough electrical power to mass adopt crypto. Even Ethereum 2.0 is still something like double the power of Visa/Mastercard despite being far more power efficient than Ether 1.0
For a long time, I had the same view as you, that this digital currency that consumes electricity and does not produce any value is a pure bubble.
But recently I have done some research on Bitcoin, and I have changed my opinion. I think Bitcoin relies on collective consensus to shape its value. That is, everyone thinks that this asset is valuable and believes that more people will recognize this value in the future, then it can rise infinitely.
This is indeed a game of passing the parcel, but if the number of people passing the parcel continues to increase in the future, then this digital currency can rise infinitely. For example, the United States is allowing pensions and various funds to enter the Bitcoin market. These institutions will convince people to believe in the value of Bitcoin and keep it rising forever. As more and more large companies and wealthy people change part of their asset pool from cash, gold, and bonds to Bitcoin, the consensus on the value of Bitcoin itself will become more and more solid.
The belief is only one factor.
The efficiency is not just the conversion of Joules to $. It is per transaction... It is a real problem.
Also the time to complete a transaction as well, I forgot to mention.
Bitcoin can take anywhere from minutes to hours, even days even to confirm a single transaction. Visa/Mastercard/Banks takes seconds.
So it literally cannot scale infinitely. How do you answer that?
Bitcoin transactions are indeed slow, but in the future, third-party technology can be used to speed up transactions.
I think the upper limit of value depends on how many people in the world believe in the "story" of Bitcoin as digital gold.
If you speed up transactions, then the power efficiency will be an even greater deficit... These are the laws of thermodynamics at this point
These flaws do exist, but let's discuss the essence of Bitcoin's value. As long as more and more countries legislate to endorse digital currencies such as Bitcoin, and more and more wealthy people, institutions, funds, and companies begin to believe in the story of digital gold and the value of Bitcoin, then Bitcoin will continue to attract funds until it reaches a certain proportion of the gold market value. From the trend point of view, more people around the world will believe in this digital gold story.
Again, that might be true, but you cannot ignore the other half of the story, otherwise you'd be riding your hyperloop train right now...