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There is no way to define the "invested equity". If someone bought BTC for $1000, waited a year until it was worth $10,000 and then traded it for ETH - did they
by TekMol 6y ago
There is no way to define the "invested equity". If someone bought BTC for $1000, waited a year until it was worth $10,000 and then traded it for ETH - did they invest $1000 or $10,000 into ETH?
- pestatije 6y agoI'm not an economist. I want to know net capital invested in BTC. With your example, that'd be $10,000. But it would be then (when they sold) and now (even though the sticker price is $50k). Alternative example: someone is holding a BTC that cost them $1, whereas someone else just bought one for $50k. Market cap says there is $100k in there. I see $50,001 there.
- TekMol 6y agoSo you say "buying" and "not selling" are two different things. What if the first guy (who bought for $1) would sell for $50k and buy again for $50k within 10 minutes. Now you "see" $100k "there"? So within 10 minutes, your definition of "invested capital" has doubled?
- pestatije 6y agoYes, correct. You could see it as: how much real money has been thrown into bitcoins and so has "disappeared" from regular money circulation. (Probably thinking it has not really "disappeared" means bitcoin is worthless. But as I said, I'm not an economist.)
- TekMol 6y agoMoney does not disappear from circulation when an asset is traded. It just moves from one person to another.