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"With trillions of dollars of cash sitting on the sidelines looking for return and trillions more being pumped into the market by governments around the world,

"With trillions of dollars of cash sitting on the sidelines looking for return and trillions more being pumped into the market by governments around the world, nothing is too expensive. Instead, what’s more important is finding that which is unique. That of which we can print no more. That which is finite." The trillions of dollars in QE are mostly hoarded in banks, not pumped into the markets. This is evident as M0 has increased greatly, while M1 hasn't. The purchases made in QE are mostly government bonds, the revenue of which is mostly spent on government salaries and entitlements. That's why there is very little general inflation, there aren't any big sums of new money flowing into consumer goods. The trillions of private dollars chasing returns are still mostly risk-averse. It's not venture capital. It's not going to small business or home-owners. It may have gone into government bonds before, now it's going into the S&P. That's asset price inflation. Buying commodities such as gold (or Bitcoin) as a hedge against inflation is irrational, when assets such as stocks are both inflating in terms of price and appreciating in terms of actual value, at the same time. Of course, irrationality has never prevented prices to rise, but when your fundamentals are based mostly around "greater fool theory", you should perhaps reconsider your allocation. "It’s only a matter of time until people figure out that bitcoin is the ultimate collectible." I wouldn't deny that there's a certain sentimental value to owning one of "only" 21 million Bitcoins, but I wouldn't personally put it anywhere near five figures. For comparison, like many others, I enjoyed playing the original Super Mario on the NES as a child. It came on a cartridge of which about 40 million units exist, with a current value of around $10.

NoOneNew 6y ago
You bring up a whole bunch of good points which I think people need to focus on your one line of greater fool theory. Theres such a huge misunderstanding of "value". Scarcity within itself does not create value. It's the mix of demand and scarcity that does, but to have demand there needs to be some inherent value in it along with timeliness. One of the biggest fascinations I had in games was the EVE marketplace. If you dont know, EVE is a scifi mmo. The economy in the game is so legit, the devs have an econ PhD to analyze it and use it to help balance the game when new gear is in. Theres a good youtube video about this to help give a better explanation, but the jist of it, items in EVE are not permanent. Other mmos you can use whatever item indefinitely then sell it when you get something better. Dying and collecting your gear is trivial. Thus items have lower values, especially when better ones come in over time. In eve, when your ship goes boom, only 25%-50% or so of it survives... and whoever killed you nabbed it. This keeps the market value stable(ish). A bigger better gun or ship is no longer neccesarily better. The value, and I'm not talking about just price but the overall market demand, goes up for parts and ships that are niche and cost effective. I'm on a phone and this is getting too long. Overall bitcoin is an investment vehicle based on privacy and scarcity. The first part no one can deny is rather brilliant and as far as I know has worked out as advertised (though let's not kid ourselves who 90% of that demographic is). The second part... I swear to everyone reading this, just get The Great Courses so you can listen to their Econ 101 class. Or just get it from the library or even get a random econ textbook. Read it. I bet you within 30 to 50 pages you'll fully grasp how childish bitcoin is. At that, everytime a major media news source has their econ expert talk, you'll realize they were all at the bottom of their classes. Oh, somewhere in there I meant to say your comparison to Mario was bad because that game has inherent value, both nostalgia and still fun to play. You're comparing to something with no value other than giving utility companies more money due to the excess electricity generated to mine bitcoin. I still say Satoshi was just elec execs who drunkenly came up with this crypto scam: https://digiconomist.net/bitcoin-energy-consumption/ https://digiconomist.net/bitcoin-energy-consumption/
- incrudible 6y ago
  You may not personally value a Bitcoin for its nostalgia, but many people would. I disagree that Bitcoins have no inherent value. There's a lot of history surrounding Bitcoin, so the argument that they have value purely from a collector's standpoint is valid. However, it does not follow that therefore a valuation of thousands of dollars per unit of Bitcoin may be justified and not just due to speculative frenzy. I'm picking the NES game because it has roughly the same amount of units available and most people own them as a collectible, not to actually play it.

NoOneNew 6y ago

You bring up a whole bunch of good points which I think people need to focus on your one line of greater fool theory. Theres such a huge misunderstanding of "value". Scarcity within itself does not create value. It's the mix of demand and scarcity that does, but to have demand there needs to be some inherent value in it along with timeliness. One of the biggest fascinations I had in games was the EVE marketplace. If you dont know, EVE is a scifi mmo. The economy in the game is so legit, the devs have an econ PhD to analyze it and use it to help balance the game when new gear is in. Theres a good youtube video about this to help give a better explanation, but the jist of it, items in EVE are not permanent. Other mmos you can use whatever item indefinitely then sell it when you get something better. Dying and collecting your gear is trivial. Thus items have lower values, especially when better ones come in over time. In eve, when your ship goes boom, only 25%-50% or so of it survives... and whoever killed you nabbed it. This keeps the market value stable(ish). A bigger better gun or ship is no longer neccesarily better. The value, and I'm not talking about just price but the overall market demand, goes up for parts and ships that are niche and cost effective. I'm on a phone and this is getting too long. Overall bitcoin is an investment vehicle based on privacy and scarcity. The first part no one can deny is rather brilliant and as far as I know has worked out as advertised (though let's not kid ourselves who 90% of that demographic is). The second part... I swear to everyone reading this, just get The Great Courses so you can listen to their Econ 101 class. Or just get it from the library or even get a random econ textbook. Read it. I bet you within 30 to 50 pages you'll fully grasp how childish bitcoin is. At that, everytime a major media news source has their econ expert talk, you'll realize they were all at the bottom of their classes. Oh, somewhere in there I meant to say your comparison to Mario was bad because that game has inherent value, both nostalgia and still fun to play. You're comparing to something with no value other than giving utility companies more money due to the excess electricity generated to mine bitcoin. I still say Satoshi was just elec execs who drunkenly came up with this crypto scam: https://digiconomist.net/bitcoin-energy-consumption/ https://digiconomist.net/bitcoin-energy-consumption/

incrudible 6y ago
You may not personally value a Bitcoin for its nostalgia, but many people would. I disagree that Bitcoins have no inherent value. There's a lot of history surrounding Bitcoin, so the argument that they have value purely from a collector's standpoint is valid. However, it does not follow that therefore a valuation of thousands of dollars per unit of Bitcoin may be justified and not just due to speculative frenzy. I'm picking the NES game because it has roughly the same amount of units available and most people own them as a collectible, not to actually play it.