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> Stocks are a different story altogether. You are buying equity in a company that has value. The stock market might be under or overvalued at any given time, b

by craigc 9y ago

> Stocks are a different story altogether. You are buying equity in a company that has value. The stock market might be under or overvalued at any given time, but it is still tied to the value of the companies. I would say stocks are valued by the perceived value of the company and/or the potential future value. They are somewhat speculative too. Look at Tesla or Amazon for example. They have insane values despite not even turning a profit for long periods of time. I get your point though. Bitcoin has no intrinsic value tied to anything specific, but I still don’t think that makes it a pyramid scheme. Bitcoin has A LOT value to people in countries that are on the brink of economic collapse due to inflation. Even in the United States, the FED prints over $200 billion a month. So in theory Bitcoin should hold value over the long term better than the US dollar.

rhino369 9y ago
Stocks are definitely speculative, but just not nearly to the same degree. They are speculating on what will happen in the meatspace. Telsa's valued because people are betting they'll become a major car company. And stocks like Tesla are outliers. Bitcoin speculation is now just speculation based on price alone. Why is bitcoin going up? Because people think it will go up. That is a nasty feedback loop, that right now is causing it to have insane growth. The higher the price the more demand, the more demand, the more price goes up, etc. But the opposite can (and will) happen. The demand for bitcoin drops because the price drops, the demand drops cause the price to drop further. etc. Since the stock market is based on meatspace demand, if Tesla started to spiral for no reason, someone would buy it just to make a cash profit from it. People like Warren Buffet buy companies they think are undervalued to capture the profit. >Bitcoin has A LOT value to people in countries that are on the brink of economic collapse due to inflation. Even in the United States, the FED prints over $200 billion a month. So in theory Bitcoin should hold value over the long term better than the US dollar. They'd be better off buying property, securities, or even just USDs. Bitcoin has gone up over 10 times this year. There is a huge risk it'll go back down to 1/10th. I wouldn't put any significant amount of money in such a volitile "asset."

by craigc 9y ago

rhino369 9y ago

Stocks are definitely speculative, but just not nearly to the same degree. They are speculating on what will happen in the meatspace. Telsa's valued because people are betting they'll become a major car company. And stocks like Tesla are outliers. Bitcoin speculation is now just speculation based on price alone. Why is bitcoin going up? Because people think it will go up. That is a nasty feedback loop, that right now is causing it to have insane growth. The higher the price the more demand, the more demand, the more price goes up, etc. But the opposite can (and will) happen. The demand for bitcoin drops because the price drops, the demand drops cause the price to drop further. etc. Since the stock market is based on meatspace demand, if Tesla started to spiral for no reason, someone would buy it just to make a cash profit from it. People like Warren Buffet buy companies they think are undervalued to capture the profit. >Bitcoin has A LOT value to people in countries that are on the brink of economic collapse due to inflation. Even in the United States, the FED prints over $200 billion a month. So in theory Bitcoin should hold value over the long term better than the US dollar. They'd be better off buying property, securities, or even just USDs. Bitcoin has gone up over 10 times this year. There is a huge risk it'll go back down to 1/10th. I wouldn't put any significant amount of money in such a volitile "asset."