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But "very liquid" is relative to the amount of the entire commodity you could theoretically sell. Stocks are "very liquid" because, outside of some share class
by SamBam 6y ago
But "very liquid" is relative to the amount of the entire commodity you could theoretically sell.
Stocks are "very liquid" because, outside of some share classes, you could theoretically buy nearly all the stocks. Even more importantly, you could almost always sell your entire portfolio in a single day if you wanted to, for the vast majority of stocks.
BitCoin, is that "very liquid?" There are thousands of trades every day, but what would actually happen if someone tried to unload "all" of the coins? If Satoshi popped up and tried to sell their coins, which are nominally worth over $8 billion, could they do it? Almost certainly not.
- thebean11 6y agoThe same applies to stocks, you definitely could not unload (or buy) the entire float in a day. I don't think crypto is too different in this respect.
- nightski 6y agoSomething like $50-$100B in bitcoin is traded every day. It's not the NYSE but that is pretty liquid in my opinion.
- graeme 6y agoThe bulk of that is stablecoins though, of dubious backing. You couldn’t cash out billions in dollars.
- camjohnson26 6y agoI agree with your point, also worth remembering that much of crypto trading is wash trading, but the point stands that if you bought crypto in the past 10 years you almost certainly can sell it all today at the market price.
- jcpham2 6y agoMy down payment on the new mortgage I'm taking out at the bank is not wash trading. Whether you believe something has value or not doesn't matter. Velocity and liquidity matter. No Satoshi can't sell his billions in a day but he can milk the market for millions daily. The market is that mature _today_