25/03/2021
In a recent video debate, bitcoin skeptic Frances Coppola discussed the economics of bitcoin, market manipulation and predictions for 2021 with Mike McGlone, senior commodities strategist at Bloomberg.
Coppola doubts that bitcoin will ever become a store of value, due to its high volatility, which she believes is a direct result of the asset’s fixed supply ratio.
With a fixed rate of increase in supply … only price can adjust to changes in demand, she explained. The fluctuating demand means that bitcoin’s volatility will not disappear.
McGlone believes the fixed stock of bitcoins will lead to less volatility over time.
The simple rules of the market are that you have supply and demand. They’re both insecure. That’s what creates the volatility, he said. If you have a certain delivery schedule, it means that 50% of the volatility input is already gone (…) So, according to the laws of economics, the volatility of bitcoin should decrease.
Another topic of discussion were allegations that the horse belt could be used to manipulate the bitcoin market. McGlone said the accusations don’t make sense because Ter’s market capitalization is only a fraction of Bitcoin’s.
That’s like saying a little fish kicks a whale.
Coppola disagrees, noting that the bitcoin market cap includes a large number of coins that are not in circulation. Binding affects the flow, not the stock, she says. So I think Tether could really push prices up.
Pick a side and watch the full debate on our YouTube channel Cointelegraph!
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