I am still looking for an answer to my original question; however, gold itself is not stable enough to be a good currency. In the past year I believe gold's inflation rate is 25% while its deflation rate over the past 5 years is 9% per year. This is to say that gold is too volatile to act as a viably currency. Generally accepted economics today aims for an inflation rate of between 1 and 3 percent per year in order to keep away volatility, hyperinflation, and deflation.
Gold isn't stable, thus it is difficult to see how a Bitcoin market cap that is similar to a gold market cap would cause Bitcoin to have a stable price.
Gold isn't stable, thus it is difficult to see how a Bitcoin market cap that is similar to a gold market cap would cause Bitcoin to have a stable price.
I think the fluctuation comes from the low market cap. If that is the case, Bitcoin just needs to reach a higher market cap.
http://www.federalreserve.gov/faqs/currency_12773.htm
Total USD in circulation is $1.23 trillion
Once BTC reaches near that it should stabilize.
The way I see it BTC is still an infant. Once it grows up some more it will be alot more stable.
Right now it just takes some balls and a willingness to assume risk to accept bitcoin as a payment method.
Drop a bowling ball in a pool and it will make a wave and ripples all the way to the sides of the pool. Drop a bowling ball in the ocean...