Wow, so that's maybe OK for moving in/out of a >$1000 position, but horrid for spending as a currency.
See Their's Law, good money drives out bad.[0] People will hodl Bitcoin and spend fiat, driving up the price of BTC in terms of fiat until it absorbs some significant portion of global currency value. There are only 21 M coins; a deflationary crypto currency isn't for buying coffee or micro-payments.
It is displaying similar qualities to Gold in countries where governments have debased the currency.
[0] http://nakamotoinstitute.org/mempool/speculative-attack/
Were Beanie Babies good money driving out bad? https://qz.com/114753/meet-the-family-who-lost-100000-when-t...
Well, there are some broad metrics we can think about. If Bitcoin become a sort of reserve currency, or a digital gold, or a combination of both, shouldn't its total market value be a proportion of what currently occupies that title?
So, do the math. X% of Gold, or X% of reserve currency. Inject that value into 21 million Bitcoin (or the circulating supply at a given moment).
Here's a valuation prediction applying Bitcoin daily trade volume of 10% of foreign exchanges which are $5 Trillion[0]. This would price BTC at $100,000.
Only after it approaches somewhere close to these numbers, would you expect to see appreciation in the range of fiat inflation.
That's how it can be.
[0] https://www.cnbc.com/2017/05/31/bitcoin-price-forecast-hit-1...