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That’s not really an accurate comparison. Stocks are ownership in a company, which is still subject to all of the realities of operating a company. We can’t sim
by PragmaticPulp 6y ago
That’s not really an accurate comparison. Stocks are ownership in a company, which is still subject to all of the realities of operating a company. We can’t simply continue trading Hertz stock as a speculative gamble when the company goes under.
Yes, cycles of hype and supply and demand do distort stock prices, but it’s still a capital allocation market. GameStop can choose to sell shares into the hot market, much as AMC did, to raise money. Buyers of those shares are allocating capital into the company.
One of the draws of Bitcoin as a speculative instrument is that there are no fundamentals. Without fundamentals, there is no mechanism to suggest if it’s undervalued or overvalued. The only thing a Bitcoin purchase funds is more energy expenditure on mining.
- deleted 6y ago[deleted]
- thaumasiotes 6y ago> We can’t simply continue trading Hertz stock as a speculative gamble when the company goes under. What? Why not? Not only can we continue to trade stock in a defunct corporation, we do. Take a look over here: https://www.liveauctioneers.com/item/85889867_imperial-india-company-stock-certificate-from-1723 https://www.liveauctioneers.com/item/85889867_imperial-india...
- gruez 6y agoThat's trading the stock certificates, not the stock itself. Nowadays there aren't any stock certificates anymore so that point is kind of moot. I doubt you can still trade enron shares, for instance.
- thaumasiotes 6y agoThe certificates still exist; the fact that you don't get one when you buy stock just reflects the fact that you don't technically own the stock. US stocks were not dematerialized.
- MrMan 6y agoI don't mean to quibble but I would say that even though bit coin is not a quote unsuited real currency you can apply purchasing powrr parity valuation to it and compare purchasing power of bitcoin compared to other currency like instruments additionally the cost to mint a bit coin is not meaningless, just easy to neglect.