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coinmarketcap says: Market Cap: $398,126,739,977 so about 0.4 trillions for all crypto - everything and the kitchensync included. This article says that this

coinmarketcap says: Market Cap: $398,126,739,977 so about 0.4 trillions for all crypto - everything and the kitchensync included. This article says that this year alone, the government is borrowing 1 trillion. I wonder if people who say crypto is a bubble are factoring in seignorage, especially in this order of magnitude.

tehlike 9y ago
:) how much of that money is used for transacting/buying/selling goods - that is why it is a bubble.
Theodores 9y ago
So if there are 50 million people with anything from $10 to 0.4 trillion in crypto, I reckon that it is on average at the lower end of that scale, the ponzi schemes, freely printed 'Tethers' and 'valuation' boosting that figure up into some absurd number. Plus you always have the guy who mined his first bitcoins on a 386DX 66MHz machine with a maths co-processor and Hercules graphics card, however, he saved his bitcoins onto a 3" Sony drive that is not compatible with modern day 3 1/2" drives. The main market has had a bit of a tough time, the crypto side show is nothing. However it is a bubble. The bigger bubble in the economy is because of the quantitative easing that has gone on since 2008, this money has caused bubbles of its own, e.g. the crypto lark is a by-product of sorts. Where else do you put your money when banks are no more useful than hiding hard currency under the mattress? Meanwhile a large part of the world does not have access to printing presses and cannot just print money, as per the USA. These places have to buy dollars before they can buy oil. Yet these other places seem to balance their books. For instance, the Russians, despite the childish sanctions from America are managing to balance the books and not live in deficit. As for China, no deficit problem there despite the boom in development. The elephant in the room is the military spending and adventures. It would be cheaper for the USA to trade with the world on fair terms rather than have to borrow lots of money to have bases and battleships everywhere.
- devereaux 9y ago
  > because of the quantitative easing that has gone on since 2008, this money has caused bubbles of its own, e.g. the crypto lark is a by-product of sorts Agreed. Easy money has caused investment in many projects - including mal-investment in projects that would otherwise never have been started, over-investment in sectors that can't deliver as much as they promise. Said differently, the market is so hot that even turkeys can fly. When the market cools down, chicken will have a softer landing than turkeys, but only birds will stay in the air. A correction is due, but it is not clear to me that the crypto bubble will fare better or worse than the stock market or anything else. QE money will have inflated the market bubble. Private investor with more money than wits will have inflated the crypto bubble. Both will crash. The big question is, which one is the turkey, which one is the chicken. Back to my first question: I wonder if the people who call crypto a bubble factor in the seignorage. In the current environment, it may be a "rational" bubble not worse than the alternatives.
- Laforet 9y ago
  >As for China, no deficit problem there despite the boom in development. You are giving them too much optimism. The state budget is healthy only because the national government collect a disproportionate amount of tax revenue* and leave the local governments to fend for themselves, and indeed many of them have been funded entirely on debt for years now the property boom have mostly died down and took land grant money with it. *Last year 25 provinces ended up receiving more transfer payments than the taxes collected, in other words only the remaining 9 costal provinces are (sort of) without deficit. With a looming demographic crash China is not any better off than the US.

tehlike 9y ago

:) how much of that money is used for transacting/buying/selling goods - that is why it is a bubble.

Theodores 9y ago

So if there are 50 million people with anything from $10 to 0.4 trillion in crypto, I reckon that it is on average at the lower end of that scale, the ponzi schemes, freely printed 'Tethers' and 'valuation' boosting that figure up into some absurd number. Plus you always have the guy who mined his first bitcoins on a 386DX 66MHz machine with a maths co-processor and Hercules graphics card, however, he saved his bitcoins onto a 3" Sony drive that is not compatible with modern day 3 1/2" drives. The main market has had a bit of a tough time, the crypto side show is nothing. However it is a bubble. The bigger bubble in the economy is because of the quantitative easing that has gone on since 2008, this money has caused bubbles of its own, e.g. the crypto lark is a by-product of sorts. Where else do you put your money when banks are no more useful than hiding hard currency under the mattress? Meanwhile a large part of the world does not have access to printing presses and cannot just print money, as per the USA. These places have to buy dollars before they can buy oil. Yet these other places seem to balance their books. For instance, the Russians, despite the childish sanctions from America are managing to balance the books and not live in deficit. As for China, no deficit problem there despite the boom in development. The elephant in the room is the military spending and adventures. It would be cheaper for the USA to trade with the world on fair terms rather than have to borrow lots of money to have bases and battleships everywhere.

devereaux 9y ago
> because of the quantitative easing that has gone on since 2008, this money has caused bubbles of its own, e.g. the crypto lark is a by-product of sorts Agreed. Easy money has caused investment in many projects - including mal-investment in projects that would otherwise never have been started, over-investment in sectors that can't deliver as much as they promise. Said differently, the market is so hot that even turkeys can fly. When the market cools down, chicken will have a softer landing than turkeys, but only birds will stay in the air. A correction is due, but it is not clear to me that the crypto bubble will fare better or worse than the stock market or anything else. QE money will have inflated the market bubble. Private investor with more money than wits will have inflated the crypto bubble. Both will crash. The big question is, which one is the turkey, which one is the chicken. Back to my first question: I wonder if the people who call crypto a bubble factor in the seignorage. In the current environment, it may be a "rational" bubble not worse than the alternatives.
Laforet 9y ago
>As for China, no deficit problem there despite the boom in development. You are giving them too much optimism. The state budget is healthy only because the national government collect a disproportionate amount of tax revenue* and leave the local governments to fend for themselves, and indeed many of them have been funded entirely on debt for years now the property boom have mostly died down and took land grant money with it. *Last year 25 provinces ended up receiving more transfer payments than the taxes collected, in other words only the remaining 9 costal provinces are (sort of) without deficit. With a looming demographic crash China is not any better off than the US.