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Why do you think it would have any effect? It’s still a comparatively tiny market.

by reefoctopus 9y ago

malandrew 9y ago
The same could have been asked about the Tulip and Bulb craze.
- Maciek416 9y ago
  The tulip boom and bust didn't have much of an effect on the overall Dutch economy. According to this Smithsonian article, the story has been overblown significantly: https://www.smithsonianmag.com/history/there-never-was-real-tulip-fever-180964915/ https://www.smithsonianmag.com/history/there-never-was-real-...
  - lern_too_spel 9y ago
    I don't think anyone is saying the crypto bubble bust will have much of an effect on the economy either.
    - QAPereo 9y ago
      On its own definitely not, but the same could be said about the assassinstion of Archduke Ferdinand. When the world is a powder keg, it pays to keep track of the matches.
krasotkin 9y ago
> half a trillion USD is a tiny market What?
- noir_lord 9y ago
  Apple, Google, Microsoft and Amazon all have market cap larger than 500bn. Pretty much any 5 of the Fortune 100 has a market cap greater than 500bn, 500bn is a fuck tonne of money but compared to the aggregate size of the market it's pretty much bugger all.
- notyourday 9y ago
  BTC market size is the $$/Yen/GBP/Euros exchanged into BTC a day and backwards, not Max(SomeOnePaidForBtc) * BTCs outstanding.
  - ryanwaggoner 9y ago
    Interesting. Why is it this and not daily volume?
    - vkou 9y ago
      I trade you my dog for your cat. We both say that they are worth a million dollars. What is the market cap of our two-animal store-of-value ecosystem? (Unless you're an economist, the answer is not "Two million dollars.") On the other hand, if I then went ahead and sold your cat to some outside party for $600, and you sold my dog for $400, we could reasonably say that the market cap is ~$1000.
kingkawn 9y ago
It is small, but has an indeterminate reach throughout the international economy. Nobody knows where the exposures to its collapse would be. A market panic could ensue from such a collapse, followed by other vulnerabilities becoming magnified in importance to the minds of investors. This of course is a guess, and it could well have little impact. But it seems that the risk is larger than the size of this market would otherwise be in more mature sectors.
- workthrowaway27 9y ago
  It will have almost no impact at this point. It's not highly levered or used as collateral in the financial industry. There's no coupling between BTC and the rest of the financial industry.
  - freeflight 9y ago
    > There's no coupling between BTC and the rest of the financial industry. Maybe not right now, but the way things are going I wouldn't be too surprised if it actually ends up happening. I'm also sure plenty of people in the finance industry see this as a good profit opportunity; They might not find the gold themselves, but they will make plenty of money selling shovels to the people looking to find gold.
  - pishpash 9y ago
    We don't know they're not used as collateral, and it doesn't have to be in the lit markets where this happens. It could be in dark markets in Asia, having knock-on effects on demand or other investments in the real economy. There is also hedging, which automatically couples correlation into other markets.

Why do you think it would have any effect? It’s still a comparatively tiny market.

malandrew 9y ago

The same could have been asked about the Tulip and Bulb craze.

Maciek416 9y ago
The tulip boom and bust didn't have much of an effect on the overall Dutch economy. According to this Smithsonian article, the story has been overblown significantly: https://www.smithsonianmag.com/history/there-never-was-real-tulip-fever-180964915/ https://www.smithsonianmag.com/history/there-never-was-real-...
- lern_too_spel 9y ago
  I don't think anyone is saying the crypto bubble bust will have much of an effect on the economy either.
  - QAPereo 9y ago
    On its own definitely not, but the same could be said about the assassinstion of Archduke Ferdinand. When the world is a powder keg, it pays to keep track of the matches.

krasotkin 9y ago

> half a trillion USD is a tiny market What?

noir_lord 9y ago
Apple, Google, Microsoft and Amazon all have market cap larger than 500bn. Pretty much any 5 of the Fortune 100 has a market cap greater than 500bn, 500bn is a fuck tonne of money but compared to the aggregate size of the market it's pretty much bugger all.
notyourday 9y ago
BTC market size is the $$/Yen/GBP/Euros exchanged into BTC a day and backwards, not Max(SomeOnePaidForBtc) * BTCs outstanding.
- ryanwaggoner 9y ago
  Interesting. Why is it this and not daily volume?
  - vkou 9y ago
    I trade you my dog for your cat. We both say that they are worth a million dollars. What is the market cap of our two-animal store-of-value ecosystem? (Unless you're an economist, the answer is not "Two million dollars.") On the other hand, if I then went ahead and sold your cat to some outside party for $600, and you sold my dog for $400, we could reasonably say that the market cap is ~$1000.

kingkawn 9y ago

It is small, but has an indeterminate reach throughout the international economy. Nobody knows where the exposures to its collapse would be. A market panic could ensue from such a collapse, followed by other vulnerabilities becoming magnified in importance to the minds of investors. This of course is a guess, and it could well have little impact. But it seems that the risk is larger than the size of this market would otherwise be in more mature sectors.

workthrowaway27 9y ago
It will have almost no impact at this point. It's not highly levered or used as collateral in the financial industry. There's no coupling between BTC and the rest of the financial industry.
- freeflight 9y ago
  > There's no coupling between BTC and the rest of the financial industry. Maybe not right now, but the way things are going I wouldn't be too surprised if it actually ends up happening. I'm also sure plenty of people in the finance industry see this as a good profit opportunity; They might not find the gold themselves, but they will make plenty of money selling shovels to the people looking to find gold.
- pishpash 9y ago
  We don't know they're not used as collateral, and it doesn't have to be in the lit markets where this happens. It could be in dark markets in Asia, having knock-on effects on demand or other investments in the real economy. There is also hedging, which automatically couples correlation into other markets.