The Evolving Role of Bitcoin: A Discussion on Volatility and Reserve Potential
🤔In a recent segment from the program "Follow the Money," Jirayut Srupsrisopa, Founder of Bitkub, a prominent cryptocurrency exchange, shared his insights on Bitcoin's characteristics and its potential as a reserve asset. The discussion explored concerns regarding Bitcoin's price stability and its suitability for this crucial financial role.
🤔Interviewer: "Are there any inherent risks if we consider holding Bitcoin as a reserve asset? Specifically, given its volatility and stability issues, might its price performance potentially prevent it from fully serving as a reliable reserve?"
🗯️Mr. Top Jirayut: "Bitcoin's volatility has consistently decreased year over year as its user base continues to expand. Once Wall Street fully enters the market – and it wouldn't even require a full-scale entry, as just 5% of their portfolios allocated to Bitcoin could propel its price to 1 million US dollars – this represents substantial institutional capital. Currently, Bitcoin's share of global liquidity is still quite small, approximately 0.2%. Yet, even with this modest percentage, it has already reached nearly 4 million Thai Baht (equivalent to 120,000 US dollars at its All-Time High) per Bitcoin. Fundamentally, in finance, volatility is high when the user base is small, and it naturally decreases as the user base expands. What we are observing now is a significant shift: Bitcoin is increasingly becoming a flight to safety and a safe haven asset."
credit : the trader kp , Folow The Momey .
🗯️Analysis of Key Points:
🗯️Mr. Jirayut's remarks highlight a crucial aspect of Bitcoin's maturation: its decreasing volatility despite its relatively young age as an asset class. He posits that this trend is directly linked to the expanding user base. As more individuals and institutions adopt Bitcoin, the market becomes deeper and more liquid, inherently reducing dramatic price swings caused by smaller market participants.
🗯️He further emphasizes the immense potential impact of institutional money, particularly from Wall Street. The mere allocation of a small fraction (5%) of their vast portfolios could, in his view, lead to a monumental increase in Bitcoin's value. This underscores the current disproportion between Bitcoin's market capitalization and the vast pools of traditional financial liquidity.
🗯️Finally, Mr. Jirayut challenges the traditional perception of Bitcoin's volatility by suggesting it is now functioning as a safe haven asset, indicating a shift in investor sentiment where it is increasingly seen as a store of value during times of economic uncertainty, rather than solely a speculative investment. This perspective, if it continues to gain traction, could fundamentally alter how central banks and large corporations view Bitcoin's role in their reserve strategies.
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