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by trixie_
1536 days ago
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USD is manually managed to ‘tax’ holders 3% per year in the form of inflation. It is stable, but you do pay for that stability. Bitcoin on the other hand is not centrally managed for better or worse. It relies on a broad number of holders to ensure stability. Any small crytpo currency is a lot more volatile due to whales rocking the boat. At 100 trillion, there are no whales big enough to move the market significantly on their own. |
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So you're saying that if the market cap of BTC increases, that necessarily means that whales have less power. I could sympathize with this argument if that a bigger market cap entailed that BTC would be well spread among independent actors (that would thus compensate each other's behavior), but there's no evidence for this. Wealth inequality is increasing in a lot of places, why do you think it's not the case for BTC? Of course we can't know given the pseudonymous nature of the ledger, but I wouldn't bet on this.
Now, even if I grant you that, that's just one cause of instability, and there are many others. When Elon Musk influences the BTC/USD rate using social networks, he's not acting as a whale, he's just acting as a celebrity. It's also unclear how BTC will perform through the next financial crisis, but I don't think it'll be the last asset people will sell during a panic.
Practically speaking, there's also little sign of the volatility of BTC going down. So either its usage is not spreading, or its stability has little to do with how spread it is, but you can't have both.