Great article - appreciate your insights and research.
One lingering question that pops into my head when price fluctuates this much is: if bitcoin is this volatile how can it still be considered “money”? If I have an emergency and need to pay a medical bill, and have to sell bitcoin to cover the bill (because I have no cash!), that’s a really difficult pill to swallow. What’s the mindset solution to this dilemma? Thanks!
Thanks. In my opinion, Bitcoin is a form of money, however, it's early in its monetization phase. Meaning, adoption is low and it needs to grow massively. Because of this, it's currently extremely volatile. Once adoption grows from 1% today to 100%, its volatility will likely be significantly less. In my opinion, the main source of the volatility is not because Bitcoin is changing. It's because Bitcoin is growing so fast due to increasing adoption over time.
It would be temporary. Crashing to $0.01 has happened before (in 2011). Of course, I don't expect this to actually happen again. The point is it didn't kill BTC.
Great article - appreciate your insights and research.
One lingering question that pops into my head when price fluctuates this much is: if bitcoin is this volatile how can it still be considered “money”? If I have an emergency and need to pay a medical bill, and have to sell bitcoin to cover the bill (because I have no cash!), that’s a really difficult pill to swallow. What’s the mindset solution to this dilemma? Thanks!
Thanks. In my opinion, Bitcoin is a form of money, however, it's early in its monetization phase. Meaning, adoption is low and it needs to grow massively. Because of this, it's currently extremely volatile. Once adoption grows from 1% today to 100%, its volatility will likely be significantly less. In my opinion, the main source of the volatility is not because Bitcoin is changing. It's because Bitcoin is growing so fast due to increasing adoption over time.
“Grow massively” in addition to the 21 million limit, means a future one cannot comprehend :)
Agree that price has not been impacted by a change in Bitcoin. Thanks again for sharing your thoughts.
Strong article, Joe.
I'd be curious to hear more about what you meant here:
"If a large holder dumped a million coins and the price gapped to a penny, that would be bullish."
You must not be talking about the USD price dropping to $0.01, right? There would be no recovery from there.
It would be temporary. Crashing to $0.01 has happened before (in 2011). Of course, I don't expect this to actually happen again. The point is it didn't kill BTC.
1 cent 2011 crash video: https://www.youtube.com/watch?v=kTA0IoAIvTQ
Interesting! I see that in 2011-06-19 it dropped from $17.50 to $0.01 as part of the Mt. Gox ordeal.
https://www.binance.com/en-IN/square/post/22647632058138
Still, that feels substantially different from dropping from $67k to $0.01.
Getting back to all-time-high from there would require 12 *million* percent return.
Place your bid at $0.01 just in case! lol