What would happen to BitUSD and BitBTC if someone would dump a shit load of BTSX on the market? My guess would be that it would take much more BTSX to buy BitUSD or BitBTC.
Let's say BTSX gets really popular and you believe in the whole idea/concept. Would it not make sense to just hold BTSX, not buy any assets? This would be true even if BitUSD gets popular? Right?
You could take the "HODL" approach and only hold BTS(X) if you're a long term bull. There is a profit to be made off the fluctuations if you decide you would like to take the risk, as well.
For instance, if BTS(X) bubbles and I think it will return to a lower price, I can buy up bitUSD when the buying power of BTS(X) is high. Then when it returns to the lower price I expect, I can sell my bitUSD back for more BTSX than I originally paid, and achieve a net gain of BTSX.
Conversely, if the price is low and I think it will rise, I can place a short bitUSD order. When that order is filled (demand for bitUSD chomps through the sell wall and hits the short wall at the median price feed published by delegates) it becomes a margin order which I have 30 days to cover. If the price rises as I expect, I can buy bitUSD when my BTSX buying power is high and cover my margin position. By doing so, I borrowed bitUSD ("minted") to sell it when bitUSD was at a higher price in terms of BTSX, and I am able to repay that obligation at a lower cost later (if the cost of bitUSD vs. BTSX goes down; i.e. BTSX price rises). Thus a profit can be earned from the difference.
I'm pretty noobish at these concepts but this is how I understand the system working and why I still purchase bitUSD even as a long term BTSX bull.
But as I see it, if BitUSD or BTSX or Bitcoin for that matter gets wildly popular and used, the USD would be dead, same as EUR.
But will gold be dead? You can buy bitGLD currently and bitSLV (silver) in the future for a stable store of value, if / when fiat does take a turn for the worse.
I think BTC and BTSX will always be volatile, kind of like a publicly traded company's stock.