Sure, I fully understand the point of view you’re presenting, and I partly agree with you that Bitcoin, at least among people with little market experience, currently tends to behave as a reflexive asset. However, I don’t believe that introducing elasticity into the currency is the right solution, because we would be repeating the same mistakes of the past and the present related to manipulating the amount of supply in the market.
In that sense, to reach an equilibrium point, the only viable solution I see is liquidity. The more liquidity a market has, the harder it is to manipulate and the less volatile it becomes. A clear example is gold over the last decade. If we start from that example, we can get a good idea: even though gold’s supply is elastic and influenced by supply and demand, in general it has maintained a certain level of stability except in recent years, when the market surged due to global political and economic tensions.
If we apply the level of liquidity that gold has to a supply capped at 21 million, the result would be a stable market that grows at a controlled rate of appreciation over time. Of course, reaching that equilibrium point may take some time.
Sure, I fully understand the point of view you’re presenting, and I partly agree with you that Bitcoin, at least among people with little market experience, currently tends to behave as a reflexive asset. However, I don’t believe that introducing elasticity into the currency is the right solution, because we would be repeating the same mistakes of the past and the present related to manipulating the amount of supply in the market.
In that sense, to reach an equilibrium point, the only viable solution I see is liquidity. The more liquidity a market has, the harder it is to manipulate and the less volatile it becomes. A clear example is gold over the last decade. If we start from that example, we can get a good idea: even though gold’s supply is elastic and influenced by supply and demand, in general it has maintained a certain level of stability except in recent years, when the market surged due to global political and economic tensions.
If we apply the level of liquidity that gold has to a supply capped at 21 million, the result would be a stable market that grows at a controlled rate of appreciation over time. Of course, reaching that equilibrium point may take some time.