Quote from: Sithara007 on January 09, 2017, 09:09:07 AM

Quote from: deisik on January 07, 2017, 07:01:31 PM

Quote from: Sithara007 on January 07, 2017, 08:43:25 AM

Quote from: jaysabi on January 06, 2017, 05:33:42 PM

Gold is at from stable. There is plenty of volatility in gold prices. Compared to Bitcoin it may look more stable, but any gold chart of sufficient length will give you enough data to see that gold suffers from volatility in the short run.

At least when compared to Bitcoin, gold is far more stable. One of the reasons is that the market cap of gold is between $5 and $6 trillion, while that of Bitcoin is less than $15 billion. So for a 1% change in the gold price, there must be at least $50 billion worth of market cap change.

You obviously omit a few important things

First, the market cap of both gold and Bitcoin reflects the total amount of these assets, produced or mined, respectively, while the price is determined by the amount traded. We don't know how many bitcoins are traded, while with gold it is only a small part of all gold out there. The rest is either stashed away for centuries, or used in jewelry and electronics as well as other industries. Further, there is a multi-trillion market of gold derivatives (so-called paper gold), which heavily distorts the price determination mechanism. In this manner, the comparison of market caps makes no particular sense

If the Bitcoin exchange rates increase in the future, then it will also become more similar to gold. Most of it will be hoarded, and only a small amount will be actively traded. Also, Bitcoin derivatives will appear in the market, once the popularity reaches a certain threshold.

I'd rather say that it will be more dissimilar to gold than it is now in that case

Gold price is stable even if only a small part of it is actually traded. Maybe, it is due to wide derivatives markets which stabilize the price of gold at certain level (gold bugs here would most certainly claim that paper gold in fact holds back the price of gold). But with Bitcoin, the emergence of Bitcoin derivatives (and they seem to have already emerged) would only spur the volatility and not constrain it, as we have all seen recently, as well as entail even more severe price manipulation