Post
Topic
Board Economics
Re: The BTC price must stabilize in the long run.
by
d5000
on 10/08/2022, 17:11:28 UTC
For the "Bitcoin Standard" to become a reality, all of the world needs to adopt Bitcoin as legal tender. This would mean "ditching" Fiat in favor of Bitcoin. I don't see Fiat collapsing unless inflation grows to a point where it's uncontrollable by world countries.
I believe it is not necessary for Fiat to collapse util we get some sort of Bitcoin standard. Both the USD standard and the Bitcoin standard could happily coexist. Currently we have a strong USD standard*, and (a bit weaker) Euro and Renminbi (yuan) "standards" which act as anchors for prices in international trade, each one more important in certain regions and less in others. Something similar could occur with Bitcoin.

Once the Bitcoin price stabilizes a bit more (like I described in my previous post) it could be attractive in some countries with high Bitcoin adoption and a weak or non-existing (like in El Salvador) local currency to price at least some services in Bitcoin. Perhaps El Salvador could do this with services like the "Chivo Pets" veterinary hospital which already are heavily subsidized (the cost is USD 0,25; "real cost" of the service - salaries etc. - should be much higher, so maybe this could be an ideal "playground" for experiments with bitcoin-based pricing). In other countries it could be advantageous for private companies to price services in Bitcoin, particularly in slight bear markets when this would be perceived as a "discount" (remember we're talking here about a future situation with much less sharp BTC price movements, so this could apply to times when Bitcoin loses ~1% per week or so in a "harsh bear market").

*I use "standard" here as a sort of "value anchor", but not something as static as the gold standard was.