In a recent video discussion, Bitcoin skeptic Francis Coppola spoke with Mike McGlon, Chief Commodities Strategist at Bloomberg, about Bitcoin’s economy, market manipulation and forecasts for 2021.
Coppola doubts that Bitcoin will ever become a value asset due to its high volatility, which she says is a direct result of the asset’s stable supply rate.
“With a constant increase in supply (…), the only thing that can adapt to changes in demand is the price,” she explained. Fluctuations in demand mean that Bitcoin’s volatility will continue.
On the other hand, McGlone believes that a stable supply of bitcoins will reduce volatility over time.
“The simple rules for markets are that you have supply and demand. Both are uncertain. He explained that this is what creates instability. “If you have a specific delivery plan, it means that 50 percent of this contribution to volatility has already passed (…), therefore, according to the laws of economics, Bitcoin’s volatility should decrease.”
Another topic of discussion was claims that stable Tether could be used to manipulate the bitcoin market. According to McGlone, these claims are “meaningless” considering that Tether’s market value is only a small fraction of Bitcoin’s value.
“It’s like saying a fish kicks a whale,” he said.
Coppola disagreed, saying that Bitcoin’s market value includes a large number of non-marketable currencies. “What drives the pressure is the power, not the stock,” she said, “so I think it can really move the price.”