What are some ways for virtual currency like bit coin to have price stability?
If there is a method, can it exert its influence only in a country or a large group?
However, when virtual money has price stability, how does it differ from existing currency?
There is no straightforward approach that a currency can take to achieve price stability.
There are things that can contribute to a more stable exchange rate, however. These things are not specific for virtual currencies, though, but also apply to commodities or stock markets.
Mainly, trading liquidity and market availability are key to achieve price stability. The more an asset is traded, the more stable it will become over time. Especially when it is traded in different ways. F.e. the presence of arbitrage and margin trading have an effect on the stability of the price.
Bitcoin has a long way to go on those fronts. Even though there a numerous Bitcoin exchange websites of which several already support margin trading, the liquidity is still very low compared to traditional FX and commodity markets. Many people think that the creation of a Bitcoin ETF will benefit price stability, as it enables a new range of traders to enter the market.