By being in the general markets, bitcoin will finally have mass access to leveraged trading. The result will be that bitcoin will finally see a 'true bubble'. While the bitcoin price has been decreasing, it's not really been a bubble as the popping of a bubble is usually twice as fast as its inflation, the opposite of which is true in the current bitcoin decrease.
A good resource on the connection between leverage and financial bubbles is Kindleberger's "Manias, Panics, and Crashes"
You really can't lever up equities all that much. Mom & pop can margin up to 50%. Even professional investors are quite constrained in how much leverage they can apply for outright bets.
Which is ridiculous, because an S&P500 index fund is a much less risky asset over 30 years than a 4-bdrm house on Maple St in Anywhere, Michigan, yet 20:1 leverage is available for the latter. Unfortunately the government favors homes as an asset class and has distorted the market with policy.
I'd much rather put $50,000 down on something like a 30-yr mortgage for $250,000 in a diversified index fund than do the same in a house. But alas this isn't an available product.
I'd much rather put $50,000 down on something like a 30-yr mortgage for $250,000 in a diversified index fund than do the same in a house. But alas this isn't an available product.
I agree with your point, but at the same time I'm not sure I'd want the irrational exuberance that we saw (and will see again) in the real estate market to start happening to equities!
Nonetheless I think the culture of bitcoin as it is currently is more leverage averse than normal which is why the decline this year has not been a precipitous one. My point being that the up and down dynamic of bitcoin will start to change.
A good resource on the connection between leverage and financial bubbles is Kindleberger's "Manias, Panics, and Crashes"