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Nothing in this article is new, but OK. Here is its conclusion: > If everyone tried to realise their Bitcoin wealth for millions, the market would dry up and t

Nothing in this article is new, but OK. Here is its conclusion: > If everyone tried to realise their Bitcoin wealth for millions, the market would dry up and the price would crash; [...]. And because investors know that could happen, there is every incentive to sell first. When the crash comes, and it cannot be too far away, it will be dramatic. Let's try this with something else: If everyone tried to realise their Google stocks for millions, the market would dry up and the price would crash; [...]. And because investors know that could happen, there is every incentive to sell first. When the crash comes, and it cannot be too far away, it will be dramatic. If everyone tried to realise their hoarded gold for millions, the market would dry up and the price would crash; [...]. And because investors know that could happen, there is every incentive to sell first. When the crash comes, and it cannot be too far away, it will be dramatic. Look, I'm an economist! Sell your Google shares NOW! (Or, to make the point directly, yes "that could happen", but that doesn't mean that it's likely. And if it's not likely, the conclusion doesn't hold. And if the conclusion doesn't hold, the author is not justified in saying that it's likely. The argument is essentially a circular one: If I assume that Bitcoin is likely to crash, I can "reason out" that it is likely to crash.)

howlin 9y ago
Google shares represent a stake in Google's revenue stream. It has an intrinsic value beyond what you could currently sell a share at on the stock market. Likewise gold has some intrinsic value in manufacturing and ornamentation. Bitcoin has no intrinsic value. Its value is just what you can trade it for at the moment.
- tom_mellior 9y ago
  > Google shares represent a stake in Google's revenue stream. It has an intrinsic value [...] I'm not up to date on Google specifically, but for a long time in its existence, it did not pay a dividend, so its shares did not represent a meaningful stake in Google's revenue stream. Did they have an intrinsic value anyway? But regardless of your answer to that, my statement stands. If everyone holding Google stocks suddenly started selling them off, the price would crash. It's just very unlikely that it would happen. More likely for Bitcoin? Maybe, but people have made this doomsday argument for quite a while now, and so far it's not proven right.
  - jonex 9y ago
    You buy stake in _future_ dividends. For companies that don't have any dividend currently you just have to compensate for the time delay when calculating the value. If everyone would race to sell Google stocks for no reason, the price would quickly drop to a level where it would make huge sense to start buying. Imaging having a dividend to price ratio of 1000%. Even with no dividend, buying stocks (preferably with voting rights) in a company at a price to profit ratio of 1000% would be a great deal as it'd be a small thing to start paying dividends with those profit levels. This does not mean that there aren't overvalued stocks and physical assets which does not make sense to buy at the current price. Bubbles has occurred before...
    - tom_mellior 9y ago
      > You buy stake in _future_ dividends. So no intrinsic value then. Just the expectation of possible future earnings. That obviously cannot work! > the price would quickly drop to a level where it would make huge sense to start buying Like for Bitcoin. Yes, there would be enough Bitcoin fans who got rich enough on Bitcoin to have spare cash to start buying if it dropped a lot. Thanks for playing.

howlin 9y ago

Google shares represent a stake in Google's revenue stream. It has an intrinsic value beyond what you could currently sell a share at on the stock market. Likewise gold has some intrinsic value in manufacturing and ornamentation. Bitcoin has no intrinsic value. Its value is just what you can trade it for at the moment.

tom_mellior 9y ago
> Google shares represent a stake in Google's revenue stream. It has an intrinsic value [...] I'm not up to date on Google specifically, but for a long time in its existence, it did not pay a dividend, so its shares did not represent a meaningful stake in Google's revenue stream. Did they have an intrinsic value anyway? But regardless of your answer to that, my statement stands. If everyone holding Google stocks suddenly started selling them off, the price would crash. It's just very unlikely that it would happen. More likely for Bitcoin? Maybe, but people have made this doomsday argument for quite a while now, and so far it's not proven right.
- jonex 9y ago
  You buy stake in _future_ dividends. For companies that don't have any dividend currently you just have to compensate for the time delay when calculating the value. If everyone would race to sell Google stocks for no reason, the price would quickly drop to a level where it would make huge sense to start buying. Imaging having a dividend to price ratio of 1000%. Even with no dividend, buying stocks (preferably with voting rights) in a company at a price to profit ratio of 1000% would be a great deal as it'd be a small thing to start paying dividends with those profit levels. This does not mean that there aren't overvalued stocks and physical assets which does not make sense to buy at the current price. Bubbles has occurred before...
  - tom_mellior 9y ago
    > You buy stake in _future_ dividends. So no intrinsic value then. Just the expectation of possible future earnings. That obviously cannot work! > the price would quickly drop to a level where it would make huge sense to start buying Like for Bitcoin. Yes, there would be enough Bitcoin fans who got rich enough on Bitcoin to have spare cash to start buying if it dropped a lot. Thanks for playing.