When Visa and MasterCard will warm up to bitcoin they will have ideal product for all the bitcoin millionaires.
When you are long on bitcoin you almost don't care about volatility. Because you can't predict the future the only good time to buy bitcoin is when you have too much dollars and the only good time when to sell bitcoins is when you have not enough dollars.
Sure, now you have 10 mln dollars in BTC at all tine high, and 2 mln after price drops but in day to day purchases it doesn't matter.
MasterCard could offer joint dollar-bitcoin account that works as follows:
You have some amount of dollars on that account, whenever you pay for something price is deducted from dollar balance.
If dollar balance is insufficient then some portion of bitcoin is sold automatically from your bitcoin balance to give you some multiples of thousands of dollars. You could also have manual trading available if you want to gamble a bit and buy some bitcoins if it dropped to 20% of last ATH or sell some ... I don't know when... when you are drunk and think you can predict the end of the bull run..
Not sure how much bitcoins would someone entrust MasterCard with current bankruptcy law but if it was significant enough amount then all bitcoin millionaires would get to use their fortunes totally hassle free.
> Sure, now you have 10 mln dollars in BTC at all tine high, and 2 mln after price drops but in day to day purchases it doesn't matter.
This doesn't track at all, unless it is a safe assumption that the general trend of Bitcoin will always be up, and you are able to time the market to do any major withdrawals at higher prices. Or, you don't have any major withdrawals, and you luck out in that your many small withdrawals average out at a higher price.
None of that is guaranteed, and with Bitcoin's volatility, you're in for a bit of a ride every step of the way.
For people who have big Bitcoin hoards due to (say) mining back when mining was cheap, maybe they won't mind the swings so much since all of it is "free surprise money", but this doesn't really work for people who bought into Bitcoin in the last 5 years or so (either by buying coins with fiat currency, or by building expensive mining rigs and burning electricity).
(If you're solely talking about the first kind of person, then: apologies! In that case I think you're pretty much on the nose.)
Compare this to wealth of Elon Musk. This month he's the richest person on planet, two months ago he wasn't even in top 10 (I think). Did anything changed for him? No. Can he not be the richest man on the planet in two months? Sure. Will it change anything for him? Still no.
I pretty much think about people who got into bitcoin early and they have more than 1000% gain and just hodl because they don't have much use for that kind of money.
Their daily purchases would be minuscule percentage of their bitcoin wealth.
The future would be very weird if the singular determinant of a person's success in life is how early they invested in Bitcoin.
Which is one of many reasons why we're not going to have a mass switchover to Bitcoin. It wouldn't actually benefit the average person, but it would make early adopters ridiculously wealthy for having clicked the right buy button at the right time and not lost their private key along the way.
In reality, once Bitcoin becomes a mechanism for the early adopters to wield wealth over the later adopters, everyone who didn't get rich early on will switch to playing a different game. No reason to go all-in on Bitcoin if the system is stacked in so far in favor of early adopters that you'll never be one of the wealthy ones.
>In reality, once Bitcoin becomes a mechanism for the early adopters to wield wealth over the later adopters, everyone who didn't get rich early on will switch to playing a different game. No reason to go all-in on Bitcoin if the system is stacked in so far in favor of early adopters that you'll never be one of the wealthy ones.
Where I live, this is how some people my age are starting to feel about real estate. Maybe that's why cryptos are so popular, for better or worse, among younger people.
This isn't a new situation or unique to Bitcoin, though.
It's the exact same story for any high net worth investors with most of their net worth tied up in stocks.
If you have 10 million dollars invested, be it stocks or Bitcoin, then pulling out $10K (0.1%) here and there to top up your cash account or pay your credit card off each month isn't exactly a huge deal. Investing that last 0.1% into stocks or Bitcoin at all times doesn't make a measurable impact on your overall returns.
This is very similar to what I'm currently doing, just borrowing against my Bitcoin holdings using MakerDAO, I have good liquidity on a day to day basis and my Bitcoin is still appreciating.
As long as there's no bugs in the smart contract, I don't plan on ever paying down that debt, since I expect the value of BTC to rise much faster than the value of my debt. My liquidation price is very low and if it were to reach that, it would mean a catastrophe anyways.
When you are long on bitcoin you almost don't care about volatility. Because you can't predict the future the only good time to buy bitcoin is when you have too much dollars and the only good time when to sell bitcoins is when you have not enough dollars.
Sure, now you have 10 mln dollars in BTC at all tine high, and 2 mln after price drops but in day to day purchases it doesn't matter.
MasterCard could offer joint dollar-bitcoin account that works as follows:
You have some amount of dollars on that account, whenever you pay for something price is deducted from dollar balance.
If dollar balance is insufficient then some portion of bitcoin is sold automatically from your bitcoin balance to give you some multiples of thousands of dollars. You could also have manual trading available if you want to gamble a bit and buy some bitcoins if it dropped to 20% of last ATH or sell some ... I don't know when... when you are drunk and think you can predict the end of the bull run..
Not sure how much bitcoins would someone entrust MasterCard with current bankruptcy law but if it was significant enough amount then all bitcoin millionaires would get to use their fortunes totally hassle free.