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I think bitcoin only proves that financial markets can be highly irrational, a fact that has been proven repeatedly. You could say the same thing about any cur
by Synaesthesia 8y ago
I think bitcoin only proves that financial markets can be highly irrational, a fact that has been proven repeatedly.
You could say the same thing about any currency, future or derivative.
- JumpCrisscross 8y ago> You could say the same thing about any currency, future or derivative Not really. Derivatives have intrinsic values. There are fundamental properties that push their prices into certain equilibria. Currencies are more complicated. But between interest rates, which all modern currencies natively support, and characteristics of the underlying economy, here too one can derive boundaries. Cryptocurrencies don't have this because (a) they don't natively support rates and (b) have a poorly-defined exclusive economic base (if it exists at all). So you end up with a number that jolts around pretty much purely on animal spirits.
- Retric 8y agoNational currencies are backed up by needing to pay taxes in them. Sell a car for bitcoin and the IRS still needs it's cash.