708 sats \ 10 replies \ @siggy47 30 Nov 2023 \ on: Cycles and inevitability bitcoin
I wonder if there is evidence that would support your theory that there's a correlation between bitcoin price stability and increased adoption? Also, is there a correlation between btc price stability and more speculative interest? This isn't as obvious, since most newbies want big fiat gains and want to see some NGU first.
Wrt the former, you're right, evidence needed. I was thinking of this in terms of 'real' adoption by e.g., people in developing world, who can't afford a lot of downward volatility. You hear the point asserted but I don't have the data to prove it.
Wrt the latter, I think you're right: I think most speculative interest hooks in once things start moving. Unless you're Michael Saylor.
Would be really good to know how much of this Saylor himself kicks up, actually, as per today's announcement.
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I'm curious. What good measures of adoption do we really have? Sales of hardware wallets? New addresses? Trouble with these is that these are likely to go up during periods of rampant speculation, which is not true adoption.
Addresses with long-term hodling? One issue here is that a lot of speculators might jump in, then just leave their addresses inactive until the next bull market.
Do we have metrics for actual economic transactions using bitcoins? Like sales of gift cards? This might be a good metric and is likely to increase during times of price stability.
Number of merchants accepting Bitcoin as payments?
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Real adoption? It's tough. I doubt any chain analysis would provide real nsight. Number of merchants would be a valuable indicator. LN nodes and transactions, maybe. Merchant sales volume? BTC map growth? Nostr zap growth. Podcasting 2.0 growth?
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LN nodes with non-zero channel balances (to skip all the Umbrel / MyNode installations) would be decent, I think, but probably undersell it quite a bit. I like nostr zap growth -- SN total zaps would be good, too, since there's a real innovation on SN made possible by the entire btc ecosystem.
I wonder if that's gettable through the API? I bet it is.
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Perhaps I'm confused here but on your first point - when you ask for evidence of price stability and increased adoption (as opposed to high prices.
I know that when something has a high price there doesn't seem to be any volatility anymore - as the view is zoomed out more. I don't think I'm describing this very well am I... I hope you can understand what I mean.
However, perhaps I'm missing what you're saying about evidence (and especially increased adoption)
here...
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What I'm talking about is something that shows that when the price is stable, more people decide to use bitcoin. @elvismercury brought up a good point that this may be the case in developing countries, and especially if the local fiat is experiencing hyperinflation. We can't be certain, though, since USD stable coins seem to get adopted at least as frequently in those situations. Again, I'm just guessing, and that's why I would like evidence.
One other thing. I am pretty sure that at high prices, bitcoin has historically been anything but stable. During extreme bubbles and crashes there is a lot of volatility.
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One other thing. I am pretty sure that at high prices, bitcoin has historically been anything but stable. During extreme bubbles and crashes there is a lot of volatility.
Yep. That's another reason for my assumption that, in terms of its actual use as money (e.g., a in its guise as a medium of exchange on relatively short timescales) the best time for most people is during those boring lulls.
Its usage at other times is inherently speculative, regardless of the language people want to employ -- if you're accumulating because you think you'll be able to use it as money in a decade, that's an investment.
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Maybe I'm thinking far beyond my lifetime, but this is how I see it (it's not my hypothesis, but I can only find an obscure source)
If the price drops $5,000 today - sure, all hell breaks loose.
However, if it drops $5,000 when it's 20x what it is today - a $5,000 drop still looks like calm water.
Now, that obscure source, BiTcOiN eCoNoMiSt Charlie Allnut - who was years ahead of his time1.
Now all that little choppin', them's shallas miss
It might make sense - if it doesn't, it might raise a smile at least
¯_ (ツ) _/¯
Footnotes
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Bogart to Hepburn charting the water in The African Queen (1951) ↩
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Great movie. Of course volatility has to be measured by percentage moves, not actual fiat value moves.
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Bogart mainly thought with fiat - Pounds, Shillings and Pence - you know, LSD
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