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The argument is that crypto has little to no intrinsic value and the price is being moved by speculation. In that case, the value comes from how many other spec

The argument is that crypto has little to no intrinsic value and the price is being moved by speculation. In that case, the value comes from how many other speculators are willing to speculate in your currency - more options means fewer dollars buying bitcoin. The fact that pretty much every crypto of non-trivial float trades in lock step with BTC definitely supports the "no intrinsic value" theory.

thebean11 5y ago
Sounds like two separate arguments, I don't really see the through line. The value of BTC comes from the mining security, and you cannot mine multiple chains at once with the same hardware. > The fact that pretty much every crypto of non-trivial float trades in lock step with BTC definitely supports the "no intrinsic value" theory. They are highly correlated but certainly not lock step, see the 1 month ETH/BTC chart. Assets on the stock market are also highly correlated to each other, so I don't quite follow.
- NationalPark 5y ago
  Sure, I mean you're just describing the opposite position, that the price of cryptocurrencies is reflecting some intrinsic value and that speculators have a negligible impact on the price. In that case market forces should eventually reveal some stable winners and all the deflationary stuff that lead us down this rabbit hole applies again.
  - thebean11 5y ago
    No I don't see the relationship. Let's assume no intrinsic value for the sake of argument. How do you get from there to "additional coins steal market cap from existing coins"? Seems easy to craft some counterexample, like "Doge acts as a marketing campaign for crypto as a whole and will lead to net-inflows to the BTC market".
    - NationalPark 5y ago
      I'm just describing the plausible argument that the original commenter said didn't exist - to that end, it should be obvious that a bullish investor, who believes crypto is the future of finance, holding a balanced basket of crypto investments, might invest less in any individual coin as more potential successes appear that must be hedged against.
      - thebean11 5y ago
        > balanced basket of crypto investments That's fair, but I doubt it would deviate very much from the top 5-10, and that each of them would have significant differences from each other (ie not carbon copy clones). I would argue that most of the value in those top 5-10 was net-new and not a dilution of Bitcoin. The notion I'm arguing against is that me creating MyCoolCoinX on the fourth page of coinmarketcap is somehow diluting BTC, any more than some new pink sheet penny stock is diluting AMZN. Doge is an interesting case, in that it is the same tech as BTC with just some parameter tweaks. My guess is that most Doge investors are newer to the market, and wouldn't have otherwise invested but I could be wrong.

thebean11 5y ago

Sounds like two separate arguments, I don't really see the through line. The value of BTC comes from the mining security, and you cannot mine multiple chains at once with the same hardware. > The fact that pretty much every crypto of non-trivial float trades in lock step with BTC definitely supports the "no intrinsic value" theory. They are highly correlated but certainly not lock step, see the 1 month ETH/BTC chart. Assets on the stock market are also highly correlated to each other, so I don't quite follow.

NationalPark 5y ago
Sure, I mean you're just describing the opposite position, that the price of cryptocurrencies is reflecting some intrinsic value and that speculators have a negligible impact on the price. In that case market forces should eventually reveal some stable winners and all the deflationary stuff that lead us down this rabbit hole applies again.
- thebean11 5y ago
  No I don't see the relationship. Let's assume no intrinsic value for the sake of argument. How do you get from there to "additional coins steal market cap from existing coins"? Seems easy to craft some counterexample, like "Doge acts as a marketing campaign for crypto as a whole and will lead to net-inflows to the BTC market".
  - NationalPark 5y ago
    I'm just describing the plausible argument that the original commenter said didn't exist - to that end, it should be obvious that a bullish investor, who believes crypto is the future of finance, holding a balanced basket of crypto investments, might invest less in any individual coin as more potential successes appear that must be hedged against.
    - thebean11 5y ago
      > balanced basket of crypto investments That's fair, but I doubt it would deviate very much from the top 5-10, and that each of them would have significant differences from each other (ie not carbon copy clones). I would argue that most of the value in those top 5-10 was net-new and not a dilution of Bitcoin. The notion I'm arguing against is that me creating MyCoolCoinX on the fourth page of coinmarketcap is somehow diluting BTC, any more than some new pink sheet penny stock is diluting AMZN. Doge is an interesting case, in that it is the same tech as BTC with just some parameter tweaks. My guess is that most Doge investors are newer to the market, and wouldn't have otherwise invested but I could be wrong.