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So what if it is a deterministic amount? You still need to have enough market demand to support the price. There's plenty of limited / fixed-supply resources (s
by jstx1 5y ago
So what if it is a deterministic amount? You still need to have enough market demand to support the price. There's plenty of limited / fixed-supply resources (some of them in the crypto space) that nobody cares enough to buy or hold.
If the demand is driven by some common belief that it will keep going up which in turn drives the price up which supports that common belief which in turn... - I'm not an expert on market dynamics to predict when and how those things end; it could end very badly when the trend reverses and it can also make some people a lot of money in the meantime. But it's a speculative game in its nature, there isn't anything fundamental that says that Bitcoin needs to have any relation to money supply at all.
- abroad 5y agoI understand your point but... Isn't gold speculative in nature today? If any central bank can print as much as they want, what's the relation between gold and money supply now?
- jstx1 5y agoI haven't mentioned gold at all. If there's a fundamental relationship between money supply and Bitcoin, you should be able to outline it without referring to gold.
- hobofan 5y ago> what's the relation between gold and money supply now? Are you referring to the gold standard[0]? As you can see from the Wikipedia page, that concept has long been abandoned by national banks. So there is no special relation between gold and money supply nowadays (at least not one that differs in any meaningful way from any other natural resource). [0]: https://en.wikipedia.org/wiki/Gold_standard https://en.wikipedia.org/wiki/Gold_standard
- unicornmama 5y agoIt’s a misconception that gold is purely speculative. Half of gold is used for jewelry and 7.5% is used in industrial application. Even if all the financial demand would go to zero, the price of gold would not go to zero. https://www.investopedia.com/financial-edge/0311/what-drives-the-price-of-gold.aspx https://www.investopedia.com/financial-edge/0311/what-drives...