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The post glosses over the most obvious explanation: because any serious and widespread ban will cause its price to soar, and this will be both an embarrassment
by jMyles 6y ago
The post glosses over the most obvious explanation: because any serious and widespread ban will cause its price to soar, and this will be both an embarrassment to the state(s) in question and, if it truly is threatening in some way, make it moreso.
I'm astonished at the way this is hand-waved:
> Remember, if governments truly believed Bitcoin were a threat, they would outlaw it and shut down cryptocurrency exchanges. This would crater prices and liquidity. It would not be the end of Bitcoin of course, but it would be the end of Bitcoin’s dream of displacing gold.
...what? Is there any example of government banning something and that thing later appearing in an illicit market at a lower price? I can't think of one.
- amelius 6y agoYou're missing the fact that people can still invest in other things.
- jMyles 6y agoAm I? In what way do you think that the presence of a nearly infinite number of other instruments changes the tendency for illicit markets to price things at a premium?
- amelius 6y agoLook, many people use Bitcoin as a speculative investment. Most people want to keep away from criminal activity, except if it is the only way to get access to something (like drugs). If Bitcoin were banned, most people would invest in other things and hence Bitcoin price would drop.
- jMyles 6y agoI don't know if fewer people will choose to hold bitcoin in such a scenario. I think that there's something to be said about the social and political complexity that might lead to such a decision, and whether that is a factor for peoples' thinking. I am, however, confident, that irrespective of the number of holders, that the price will go up. I don't understand your last point at all. It seems to me to be the same as suggesting that in the presence of cannabis prohibition that the price will decrease because people will choose to use other medicines and psychoactives. The two are only distantly related; fewer users does not imply a lower price.
- amelius 6y agoA sudden flood of sellers will cause the price to crash. At that point, the question is if the price can recover. In theory it could, but I wouldn't be so confident, as the currency just lost a big chunk of its market.