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It is a ponzi scheme. I think eventually majority of investors will participate in it. At present, total stock + gold market is $100T. If you expect 5% of this

It is a ponzi scheme. I think eventually majority of investors will participate in it. At present, total stock + gold market is $100T. If you expect 5% of this diverted to BTC then upper bound on BTC market cap is $5T. This means upper bound on BTC price is $250K. When that price arrives, suddenly things will become stagnant. People will wait for few years in the hope something will happen and then sell out for more appreciating assets. This will eventually cause BTC prices to oscillate between $100K-$200K. In addition, you have couple of major risks such as feds making it illegal or taxing it heavily or some other coin that Elon Musk starts preaching heavily. At this point, if you do have BTC, you should sell out at $70K-100K range just to be safe. If you keep holding after that then you are taking increasingly bigger risks but much less reward.

WrtCdEvrydy 6y ago
I think the price of BTC will continue trending upwards depending on the economic outcome. It will basically become a hedge against the system every time there's a recession (every 10 years or so).
will4274 6y ago
> This means upper bound on BTC price is $250K. Dividing the total market cap by the total number of BTC relies on an incorrect assumption that BTC are never destroyed. But, in fact, we know that plenty of people have lost BTC keys. It's totally possible that the practical supply of BTC is far lower (e.g. 10%) than the supply of BTC on paper. In an extreme case (e.g. if less than 1% of BTC are actually usable), the paper market cap of BTC could exceed the size of the US economy, even while the true market cap is less than 5% (using your number).
morpheos137 6y ago
Let me preface this by saying I agree bitcoin is like a decentralised Ponzi scheme...but you are wrong in your assumption that maximum price = number dollars in * number of bitcoins. The trick of bitcoin is that creates the illusion of value in its price in dollar (or other fiat) terms. There is no true underlying value. Note: bitcoin depends on the dollar because there is no independent bitcoin economy. So the price is simply what fools are willing to pay for it recently, what the last bid was. How much money has gone into the bitcoin black hole over time has almost no bearing on its price at any given instance besides hysteresis (i.e. the current instant price is near the last price). Price is thus simply the dollar amount that people are willing to pay in the present moment for a bitcoin; there is no reason it could not go to $1,000,000 a coin if people are dumb enough to pay that amount. This is why bitcoin is like a black hole. It is not an equity, since there is no underlying, fungible asset, i.e. ASIC miners can't be used for general purpose computation, bitcoin is not a share of ownership in anything, etc. The market cap of bitcoin is zero at all times regardless the price. The price provides an illusion of market cap or value but is not actually value in of itself. It exerts a pull on real money that can be used to fund productive or legal investment, like a black hole, but pouring money into Bitcoin does not give it value. Money can be destroyed, just like matter into a black hole and this is something cryptoholders will find out when (1) there is no greater fool left or (2) bitcoin soaks up so much real money that it has real economic effects, e.g. deflation, which results in a regulatory social clampdown or (3) there is a regulatory clamp down before that point due to recognition of bitcoins only real use case, illegal activities.

WrtCdEvrydy 6y ago

I think the price of BTC will continue trending upwards depending on the economic outcome. It will basically become a hedge against the system every time there's a recession (every 10 years or so).

will4274 6y ago

> This means upper bound on BTC price is $250K. Dividing the total market cap by the total number of BTC relies on an incorrect assumption that BTC are never destroyed. But, in fact, we know that plenty of people have lost BTC keys. It's totally possible that the practical supply of BTC is far lower (e.g. 10%) than the supply of BTC on paper. In an extreme case (e.g. if less than 1% of BTC are actually usable), the paper market cap of BTC could exceed the size of the US economy, even while the true market cap is less than 5% (using your number).

morpheos137 6y ago

Let me preface this by saying I agree bitcoin is like a decentralised Ponzi scheme...but you are wrong in your assumption that maximum price = number dollars in * number of bitcoins. The trick of bitcoin is that creates the illusion of value in its price in dollar (or other fiat) terms. There is no true underlying value. Note: bitcoin depends on the dollar because there is no independent bitcoin economy. So the price is simply what fools are willing to pay for it recently, what the last bid was. How much money has gone into the bitcoin black hole over time has almost no bearing on its price at any given instance besides hysteresis (i.e. the current instant price is near the last price). Price is thus simply the dollar amount that people are willing to pay in the present moment for a bitcoin; there is no reason it could not go to $1,000,000 a coin if people are dumb enough to pay that amount. This is why bitcoin is like a black hole. It is not an equity, since there is no underlying, fungible asset, i.e. ASIC miners can't be used for general purpose computation, bitcoin is not a share of ownership in anything, etc. The market cap of bitcoin is zero at all times regardless the price. The price provides an illusion of market cap or value but is not actually value in of itself. It exerts a pull on real money that can be used to fund productive or legal investment, like a black hole, but pouring money into Bitcoin does not give it value. Money can be destroyed, just like matter into a black hole and this is something cryptoholders will find out when (1) there is no greater fool left or (2) bitcoin soaks up so much real money that it has real economic effects, e.g. deflation, which results in a regulatory social clampdown or (3) there is a regulatory clamp down before that point due to recognition of bitcoins only real use case, illegal activities.