RE: My Thoughts on Creating a Bitcoin Fund From DHF to Partially Insure HBD Pegging
One problem is that we have too few of them.
Which also hurts the peg since volatility is introduced in a larger way than we prefer.
But on the medium-long term, I believe that's a good collateral.
We will have to see. Gold is a $10 trillion market cap and it still has a degree of volatility to it that cannot be overlooked. Of course, I believe Bitcoin, if it does move into the collateral realm, could end up with a $30T-$40T market cap. At that point, volatility, I would think, would be much less. That could open it up in being attractive.
The challenge is the elasticity. With it capped in number, it would make it a challenge to expand and meet the needs of the market. This is why fixed is not what the financial system needs, something the Bitcoin maxis miss.
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Yes, that's indeed a problem that is hard to overcome at high scale.