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> In addition, even now, at $3200, the market cap of bitcoin is still only ~50 billion. If you believe it has a good shot of being a superior global reserve cur

> In addition, even now, at $3200, the market cap of bitcoin is still only ~50 billion. If you believe it has a good shot of being a superior global reserve currency, then it is still cheap and you should be glad that you can buy it for $3200. I don't really understand finance, so bear with me here : why should being a "superior global reserve currency" entail a stratospheric valuation? The USD has been a de-facto global reserve currency for the last 50 years, yet it's not like an individual dollar is worth 5000+ GBP, CHF, EUR, or JPY. It seems to me like the high BTC valuation is being driven by speculation. That's fine and dandy, and as the Economist said is part of a "harmless bubble" - but ascribing this insane valuation to some kind of innate feature set of BTC seems to be misleading. Happy to be proven wrong and/or educated. This isn't exactly my wheelhouse, after all.

trhway 9y ago
> The USD has been a de-facto global reserve currency for the last 50 years, yet it's not like an individual dollar is worth 5000+ GBP, CHF, EUR, or JPY. that is because Fed doesn't want it to be that way (and for a good reason) and prints [tons of] new USD. BTC can't be printed that easy and that unlimited.
noddy1 9y ago
Depending on how you define the money supply then you could say that the total supply of the US dollar is around 12 trillion dollars (based on M2 money supply.) Given that bitcoin has a hard-coded cap of 21 million coins, if bitcoin became a reserve currency of the importance the USD currently has, you could assume it would reach a market cap of 12 trillion, meaning each bitcoin will be worth $570000. The reason the USD value has not spiraled to $5000 each is because the economists advising the government believe in inflationary currencies, and believe for some reason that the best thing for a currency to do is to devalue by 1-2% each year. They give some reasons for this which, like a lot of economics are driven by conjecture and not evidence-based. Money is printed approximately to achieve this target, however in recent years, 4 trillion dollars has been printed and given to banks, again based on very little other than economic conjecture. I'm not going to argue with proponents of this sort of economic theory because its a waste of time, however I am glad that a currency not linked to a nation state is going to be able to challenge all of these assumptions.

trhway 9y ago

> The USD has been a de-facto global reserve currency for the last 50 years, yet it's not like an individual dollar is worth 5000+ GBP, CHF, EUR, or JPY. that is because Fed doesn't want it to be that way (and for a good reason) and prints [tons of] new USD. BTC can't be printed that easy and that unlimited.

noddy1 9y ago

Depending on how you define the money supply then you could say that the total supply of the US dollar is around 12 trillion dollars (based on M2 money supply.) Given that bitcoin has a hard-coded cap of 21 million coins, if bitcoin became a reserve currency of the importance the USD currently has, you could assume it would reach a market cap of 12 trillion, meaning each bitcoin will be worth $570000. The reason the USD value has not spiraled to $5000 each is because the economists advising the government believe in inflationary currencies, and believe for some reason that the best thing for a currency to do is to devalue by 1-2% each year. They give some reasons for this which, like a lot of economics are driven by conjecture and not evidence-based. Money is printed approximately to achieve this target, however in recent years, 4 trillion dollars has been printed and given to banks, again based on very little other than economic conjecture. I'm not going to argue with proponents of this sort of economic theory because its a waste of time, however I am glad that a currency not linked to a nation state is going to be able to challenge all of these assumptions.