4 ms·
The difference is that there are fairly objective measures of value that you can apply to equities. We are probably a little overpriced right now based on P/E r
by rhino369 9y ago
The difference is that there are fairly objective measures of value that you can apply to equities. We are probably a little overpriced right now based on P/E ratios. But unless something world shattering happens, we can be pretty confident the S&P wont be at 50% of what it is today. If for no other reason than because you actually have an ownership stake in the companies.
But is there any coherent explanation for why bitcoin should be priced at 2500 dollars rather than 2.5 dollars? or 2.5 cents?
The US dollar is a bad example because it's not supposed to be used as long term store of value at all. The inflation is purposeful and much more importantly fairly predictable. A bank can lend me 1,000,000 dollars to buy a house because they can be fairly confident that inflation is going to be ~2%.
- elif 9y ago>we can be pretty confident the S&P wont be at 50% of what it is today. except that time the S&P dropped 57% (2007 to 2009 from 1,565.15 to 676.53) >But is there any coherent explanation for why bitcoin should be priced at 2500 dollars rather than 2.5 dollars? or 2.5 cents? Are you similarly skeptical about the price of gold? There is a universal need for a store of value which is not only insulated from global financial markets, but also a hedge against them. Due to mathematically certain scarcity and decentralized resistance to manipulation, crypto fulfils that need better than gold. Assuming that gold is priced primarily to fulfill this same market need, and that no gold is ever mined again, a bitcoin should be valued at $377,000.