In a recent video debate, Bitcoin skeptic Frances Coppola debated Bloomberg’s senior commodity strategist Mike McGlone on Bitcoin’s economics, market manipulation, and forecasts for 2021.
Coppola is skeptical that Bitcoin will ever succeed as a store of value because of its high volatility, which she believes is a direct result of the fixed rate of supply of the asset.
“With a fixed rate of increase in supply (…) only the price can adapt to changes in demand,” she explained. Fluctuations in demand mean that Bitcoin’s volatility is continuing.
McGlone, on the other hand, believes the fixed supply of Bitcoin will cause volatility to decrease over time.
“The simple rules of the market are that you have supply and demand. Both are unsure. That creates volatility, ”he explained. “If you have a certain supply plan, it means that 50 percent of this volatility input is already gone (…). According to the laws of economy, the volatility in Bitcoin should decrease.”
Another topic of the debate were the allegations that Stablecoin Tether could be used to manipulate the Bitcoin market. According to McGlone, these allegations “make no sense” as Tether’s market capitalization is only a small fraction of Bitcoin’s.
“It’s like saying that little fish are kicking the whale,” he argued.
Coppola disagreed, pointing out that Bitcoin’s market capitalization includes a large amount of coins that are not in circulation. “What affects Tether is the flow, not the stock,” she said. “So I think Tether could actually move the price.”
Choose your side and watch the full debate on our Cointelegraph Youtube Channel!
