Riccardo Spagni aka fluffypony, a core developer of Monero spoke about Bitcoin’s bear market recovery and its volatility, during an interview with Tech Central. He also spoke about the use case of Bitcoin [BTC].
Riccardo was asked about the recovery of the cryptocurrency space from the bear market, taking into consideration that the space is much more compressed in comparison to NASDAQ’s recovery time. To this, he agreed that the space is compressed and for Bitcoin to recover back to $1200, which was set in December 2013, it took over three and half years. He went on to say:
“It’s very good time and previous movements have been much faster. You know, some of them have been two months. So, you know, three and half years has been like the longest bear market that we’ve had and I think those periods will probably start to get longer and longer as you know as the thing the movement shifts”
Nonetheless, the developer stated that the halving of Bitcoin’s block reward every four years is a factor that is absent in the stock or equities market. He added that the change in the amount of Bitcoin’s supply is “really interesting” because the reduction in supply will have an effect even if the demand stays constant. Spagni further added:
“You’ve got this reduction in supply and you know again even if demand stays static you’ve got people going like, ‘I’m not going to sell my coins. I’m going to hodl them’, because of the hodl mentality. And if they hold on to their coins and they don’t sell them, then that basically just reduces the effective supply even more.”
Due to this, he stated, there is a constant “hammering down” on the new supply and the existing supply, and irrespective of whether the demand stays constant or increases, there is going to be volatile movement and the upward pressure on the overall market.
This was followed by Spagni speaking about Bitcoin’s adoption as a means of transaction. He stated that as traders start to bridge the gap through arbitrage trading, the market is going to see “some” stability, adding that this could happen between a timeframe of 5 to 15 years. He went on to say:
“I think we’re probably like anything from 5 to 15 years from going okay Bitcoins price is relatively stable or atleast doesn’t have these wild swings like a teenager throwing a tantrum. We’ll see like when we get to that, then makes a lot more sense to Bitcoin operate like a currency than it does not”
Spagni added that Bitcoin will be a real alternative to fiat currency when it comes to buying a cup of coffee in the next 10-15 years. He stated:
“But as a settlement option, then I think that’s very different. So you know settlement could be I’m buying stock from overseas and importing it and I need to pay my suppliers. My suppliers don’t care that much about volatility because the volatility tends to happen over you know several day period. So if I paid them and they converted immediately from Bitcoin to the local fiat currency than what differences make Bitcoin just becomes a carrier for that settlement”
He went on to say that once Bitcoin is used to pay salaries, rent and taxes, it will become a lot more powerful than it is at present. According to Spagni, this could help in the currency’s price discovery.
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