4 ms·

Can I ask where you get the 100k price point from? I am absolutely not trying to start a flame war, or have this dive into an emotional argument about the merit

by jc_811 4y ago

Can I ask where you get the 100k price point from? I am absolutely not trying to start a flame war, or have this dive into an emotional argument about the merits BTC, but am genuinely curious where somebody gets a price point from since from my eyes I can't tell how to derive any sort of "intrinsic value" from cryptocurrency. Would appreciate any sort of response or analysis!

blagie 4y ago
I believe the basic idea is that people need a value store. We just saw billions of dollars of oligarch money held in Western institutions disappear in a poof. The Ruble is way up as it's no longer safe to keep money out of Russia. It's unsafe to keep money in Russia. There really aren't safe value stores. Anything can be confiscated by aggressive government (and money inflates). There's a huge market among rich people for: * > $1M paintings are portable, and a ready store of value * > $100k watches are enough to start a new life on, in some random part of South America, Africa, or Asia, and fit on your wrist ... and so on. I can now have a USB stick with a value of $100M, and relatively untraceable if I'm careful about it. If I had $100B, that'd be a handy safety. Rich people aren't just Elon Musk and Zuckerberg. They also include a lot of people with ill-gotten wealth (e.g. crooks), questionable individuals (e.g. African oligarchs), or people with properly-gotten wealth that might be fragile in future political changes (e.g. Arab nobility).
- jc_811 4y ago
  For sure, I totally get that. I'm not saying there's no value, but I can't find out where people get specific numbers from (eg. 100k per bitcoin). Where does this 100k come from? Is it just pulled out of the air because it's higher than the current price? Is there any sort of formula, or step by step quantitative analysis, that is able to arrive at a fair market value? For example if bitcoin were being traded at 5k or 100k, everything you said in your examples would still be valid.
  - acchow 4y ago
    $100k is not the final price. They are just saying $100k as a nice round psychological milestone on its way to the moon. Bitcoin market cap is $600bn today. Total value of all gold in the world is about 9.6tn. The crypto shills are trying to push the idea that Bitcoin can replace gold.
    - AnimalMuppet 4y ago
      Wait, Bitcoin has 6% of the market cap of gold? That's really impressive. More than I expected Bitcoin to achieve, in fact.
- Traster 4y ago
  I think this is seriously going to degrade as crypto exchanges come under AML and KYC regulations. Liquidity is overwhelmingly moving to centralized exchanges and those exchanges have to support transfers to/from fiat currency which basically means they'll all end up implementing standard AML/KYC checks for any reasonable size of transactions. So yeah you might be able to store some value in this incredibly volatile speculative asset, but when it comes time to liquidate it's going to become very difficult to find a counter-party who'll hand over cash. At that point the question is what are you getting? 90 cents on the dollar? 10 cents on the dollar? I'm not sure that sort of liquidity beats other money laundering schemes.
  - aaaaaaaaata 4y ago
    > Liquidity is overwhelmingly moving to centralized exchanges Is it? Or are new people flooding into centralized exchanges faster than existing people are [(flooding into defi)+(moving to defi)]?
- unmole 4y ago
  > The Ruble is way up as it's no longer safe to keep money out of Russia. The Ruble is up because of capital and currency controls.
- harambae 4y ago
  > $100k watches are enough to start a new life on, in some random part of South America, Africa, or Asia Not trying to derail your overall point, but are $100k watches ever actually fungible to this extent? I figured it was just conspicuous consumption by people with too much money and not an item with a solid re-exchange rate to cash. (I did know a guy who had an enormous belt buckle made of gold and it seemed like a more rational way to move amounts like this.)
  - blagie 4y ago
    Yes. High-end watches are very fungible. There are nice analyses of the high-end watch market. Economics Explained, on Youtube, has a nice series of videos on these classes of assets, and how they are used by the ultrawealthy. TL;DR: - Many are good security policies. If I need to leave a country ASAP, having something like this on my wrist can be helpful. - Many are a clever way to dodge taxes, especially combined with clever financial instruments. - Many such goods are intentionally designed to appreciate (for example, by limiting production far more than supply / demand / vanity would suggest) - Consumption is often a side-benefit. If I buy a villa in France, and hang a Monet painting there, that I can use my investment for personal pleasure is just a bonus! - Diversification is helpful. If I've got a billion dollars, having a guaranteed 10M stashed away several ways can be nice if I am planning for the unexpected. On the last one, there's a whole spectrum from conspicuous consumption to investment. On goods like yachts, you come out behind, but by less than you'd expect. The cost-of-ownership is upkeep and appreciation/depreciation. I picked watches specifically (and not other luxury fashion) since they are designed as an investment. Many similar goods have minimal value once they go out-of-fashion.

by jc_811 4y ago

blagie 4y ago

I believe the basic idea is that people need a value store. We just saw billions of dollars of oligarch money held in Western institutions disappear in a poof. The Ruble is way up as it's no longer safe to keep money out of Russia. It's unsafe to keep money in Russia. There really aren't safe value stores. Anything can be confiscated by aggressive government (and money inflates). There's a huge market among rich people for: * > $1M paintings are portable, and a ready store of value * > $100k watches are enough to start a new life on, in some random part of South America, Africa, or Asia, and fit on your wrist ... and so on. I can now have a USB stick with a value of $100M, and relatively untraceable if I'm careful about it. If I had $100B, that'd be a handy safety. Rich people aren't just Elon Musk and Zuckerberg. They also include a lot of people with ill-gotten wealth (e.g. crooks), questionable individuals (e.g. African oligarchs), or people with properly-gotten wealth that might be fragile in future political changes (e.g. Arab nobility).

jc_811 4y ago
For sure, I totally get that. I'm not saying there's no value, but I can't find out where people get specific numbers from (eg. 100k per bitcoin). Where does this 100k come from? Is it just pulled out of the air because it's higher than the current price? Is there any sort of formula, or step by step quantitative analysis, that is able to arrive at a fair market value? For example if bitcoin were being traded at 5k or 100k, everything you said in your examples would still be valid.
- acchow 4y ago
  $100k is not the final price. They are just saying $100k as a nice round psychological milestone on its way to the moon. Bitcoin market cap is $600bn today. Total value of all gold in the world is about 9.6tn. The crypto shills are trying to push the idea that Bitcoin can replace gold.
  - AnimalMuppet 4y ago
    Wait, Bitcoin has 6% of the market cap of gold? That's really impressive. More than I expected Bitcoin to achieve, in fact.
Traster 4y ago
I think this is seriously going to degrade as crypto exchanges come under AML and KYC regulations. Liquidity is overwhelmingly moving to centralized exchanges and those exchanges have to support transfers to/from fiat currency which basically means they'll all end up implementing standard AML/KYC checks for any reasonable size of transactions. So yeah you might be able to store some value in this incredibly volatile speculative asset, but when it comes time to liquidate it's going to become very difficult to find a counter-party who'll hand over cash. At that point the question is what are you getting? 90 cents on the dollar? 10 cents on the dollar? I'm not sure that sort of liquidity beats other money laundering schemes.
- aaaaaaaaata 4y ago
  > Liquidity is overwhelmingly moving to centralized exchanges Is it? Or are new people flooding into centralized exchanges faster than existing people are [(flooding into defi)+(moving to defi)]?
unmole 4y ago
> The Ruble is way up as it's no longer safe to keep money out of Russia. The Ruble is up because of capital and currency controls.
harambae 4y ago
> $100k watches are enough to start a new life on, in some random part of South America, Africa, or Asia Not trying to derail your overall point, but are $100k watches ever actually fungible to this extent? I figured it was just conspicuous consumption by people with too much money and not an item with a solid re-exchange rate to cash. (I did know a guy who had an enormous belt buckle made of gold and it seemed like a more rational way to move amounts like this.)
- blagie 4y ago
  Yes. High-end watches are very fungible. There are nice analyses of the high-end watch market. Economics Explained, on Youtube, has a nice series of videos on these classes of assets, and how they are used by the ultrawealthy. TL;DR: - Many are good security policies. If I need to leave a country ASAP, having something like this on my wrist can be helpful. - Many are a clever way to dodge taxes, especially combined with clever financial instruments. - Many such goods are intentionally designed to appreciate (for example, by limiting production far more than supply / demand / vanity would suggest) - Consumption is often a side-benefit. If I buy a villa in France, and hang a Monet painting there, that I can use my investment for personal pleasure is just a bonus! - Diversification is helpful. If I've got a billion dollars, having a guaranteed 10M stashed away several ways can be nice if I am planning for the unexpected. On the last one, there's a whole spectrum from conspicuous consumption to investment. On goods like yachts, you come out behind, but by less than you'd expect. The cost-of-ownership is upkeep and appreciation/depreciation. I picked watches specifically (and not other luxury fashion) since they are designed as an investment. Many similar goods have minimal value once they go out-of-fashion.