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Crypto's price has been driven by the increase in crypto allocation in the total world investment portfolio. Right now crypto is at 2.6T, gold 11T, stocks are 1

Crypto's price has been driven by the increase in crypto allocation in the total world investment portfolio. Right now crypto is at 2.6T, gold 11T, stocks are 122T. The percentage of crypto in the world portfolio can't grow forever though. Once it reaches its limit, the harsh reality will very slowly start to settle in. Crypto doesn't generate any value (unlike stocks, bonds, real estate) and doesn't have any intrinsic value (unlike gold). Its value is entirely based on faith. The best case scenario would be growth proportional to total wealth growth. But why hold something more risky and with lower returns compared to stocks?

madsbuch 5y ago
Why doesn't it generate any value? There are crypto networks that does betting. The natural next thing is insurance, which can be considered a special case of betting. The "harsh" truth might very well be, that a lot of industries that have been governed by priviliged organisations will turn into algorithmically governed DAOs. A lot of people in the financial sector will probably loose their job, as cheaper alternatives for financial products will occur in self regulated algorithmically governed systems. The "bitcoin is the crypto definition" view should be abandoned. And it should be understood that crypto means algoritgmically governed economies for now. Later it will be algorithmic governance. Ie. Cryptos market cap is at least equal to the financial sector. And probably we are only scratching the surface with that statement.
overview 5y ago
Because there will be a time where for every 1+% that USD inflates, bitcoin won’t.
- RivieraKid 5y ago
  But Bitcoin is not competing against currency, it's competing against investment assets. Also, inflation is simply not a problem. 2.5% on average over the last 20 years, and almost no volatility. Bitcoin will never achieve that level of volatility because there's no central authority which directs its value.
  - impulser_ 5y ago
    Yes it will. As the value of an asset increases the less volatile it becomes. Gold and the USD were very volatile assets in the beginning. Only recently has the USD become stable. You don't need a central authority to direct the value.
    - RivieraKid 5y ago
      So you're saying that central bank inflation targeting doesn't decrease volatility? That is simply wrong. Gold has a high volatility and Bitcoin even higher.

madsbuch 5y ago

Why doesn't it generate any value? There are crypto networks that does betting. The natural next thing is insurance, which can be considered a special case of betting. The "harsh" truth might very well be, that a lot of industries that have been governed by priviliged organisations will turn into algorithmically governed DAOs. A lot of people in the financial sector will probably loose their job, as cheaper alternatives for financial products will occur in self regulated algorithmically governed systems. The "bitcoin is the crypto definition" view should be abandoned. And it should be understood that crypto means algoritgmically governed economies for now. Later it will be algorithmic governance. Ie. Cryptos market cap is at least equal to the financial sector. And probably we are only scratching the surface with that statement.

overview 5y ago

Because there will be a time where for every 1+% that USD inflates, bitcoin won’t.

RivieraKid 5y ago
But Bitcoin is not competing against currency, it's competing against investment assets. Also, inflation is simply not a problem. 2.5% on average over the last 20 years, and almost no volatility. Bitcoin will never achieve that level of volatility because there's no central authority which directs its value.
- impulser_ 5y ago
  Yes it will. As the value of an asset increases the less volatile it becomes. Gold and the USD were very volatile assets in the beginning. Only recently has the USD become stable. You don't need a central authority to direct the value.
  - RivieraKid 5y ago
    So you're saying that central bank inflation targeting doesn't decrease volatility? That is simply wrong. Gold has a high volatility and Bitcoin even higher.