In a recent video debate, Bitcoin skeptic Frances Coppola debated Bloomberg senior commodity strategist Mike McGlone on the economics of Bitcoin, market manipulation and predictions for 2021.
Coppola is skeptical that Bitcoin will ever succeed as a store of value because of its high volatility which, according to her, is a direct consequence of the asset’s fixed supply rate.
“With a fixed rate of increase of supply (...) the only thing that can adjust to changes in demand is price”, she explained. Demand fluctuations mean Bitcoin's volatility is here to stay.
McGlone, on the other hand, thinks that the fixed supply of Bitcoin will lead the volatility to decline over time.
“The simple rules of markets is you have supply and demand. Both are uncertain. That's what creates volatility”, he explained. “If you have a certain supply schedule, that means 50 percent of that input for volatility is already gone (...) So, by laws of economics, volatility in Bitcoin should drop”.
Another subject of debate were the allegations that stablecoin Tether may be used to manipulate the Bitcoin market. According to McGlone, these allegations “don’t make any sense”, given that the market cap of Tether is only a small fraction of Bitcoin's.
“It's like saying that little fish is kicking the whale around”, he argued.
Coppola disagreed, pointing out that Bitcoin’s market cap includes a vast amount of coins that are not in circulation. “What Tether is influencing is the flow, not the stock”, she said “So I think that Tether could actually move the price”.
Pick your side and check out the full debate on our Cointelegraph Youtube channel!