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An aside, I like how crypto borrows terminology from real financial instruments. Like "cycles" when the industry as we know it has existed for maybe 10 years. I

An aside, I like how crypto borrows terminology from real financial instruments. Like "cycles" when the industry as we know it has existed for maybe 10 years. I've even heard "fundamentals" thrown around. There's no earnings or assets! How are there fundamentals?? Aside over.

0des 4y ago
13 years
gerikson 4y ago
It's just finance cosplay.
brian_cloutier 4y ago
crypto assets have different fundamentals. For businesses it's important to understand earnings and assets because those put a floor on the price of the business: they set a price level at which you are very likely to see demand for taking over the business. At the end of the day, though, when you study fundamentals you are making guesses at supply and demand. The price of a Bitcoin depends on how many people are trying to use it for remittances and how easily those people can acquire Bitcoin and how long recipients hold before selling. Demand also depends on the macro environment and it's historic correlation with other markets. Supply depends on the issuance rate and energy prices (higher prices will force miners to sell more to pay for their operations). Many other factors are at play; by predicting them you can make guesses as to future supply and demand and future bitcoin prices.
- whatshisface 4y ago
  How is there scarcity in Bitcoin when 1, 1000, or 10⁷ Satoshi can all serve the purpose of sending one dollar overseas? I have never understood how supply and demand can work for currencies.
fleddr 4y ago
That's not what fundamentals means in crypto. Fundamentals in crypto are existential, favorable qualities of a token that can survive severe downturns (bear markets, depressions). For BTC, fundamentals are absolute scarcity combined with buy-in/popularity. For ETH, fundamentals are utility/flexibility and network effect. For HorneyDonkeyKongCoin, fundamentals are...none. It will go to zero and never come back.
- JumpCrisscross 4y ago
  > For BTC, fundamentals are absolute scarcity combined with buy-in/popularity This is literally the opposite of the meaning of fundamentals. Absolute scarcity is meaningless; in classical economics, everything is scarce. And popularity are animal spirits.
  - darkerside 4y ago
    Sometimes words have different meanings in different contexts.
  - fleddr 4y ago
    Well, words can have different meanings in different contexts. This IS what fundamentals means in the world of crypto. You don't decide on the value of a scarce asset, the owners of the asset do. If you personally believe the nominal value of a scarce asset like BTC is meaningless and thus zero, short it.
    - JumpCrisscross 4y ago
      > words can have different meanings in different contexts I agree. It's just convenient that fundamentals, by this definition, always equals the market price. At which point one asks why there are two words other than for misdirection.

0des 4y ago

13 years

gerikson 4y ago

It's just finance cosplay.

brian_cloutier 4y ago

crypto assets have different fundamentals. For businesses it's important to understand earnings and assets because those put a floor on the price of the business: they set a price level at which you are very likely to see demand for taking over the business. At the end of the day, though, when you study fundamentals you are making guesses at supply and demand. The price of a Bitcoin depends on how many people are trying to use it for remittances and how easily those people can acquire Bitcoin and how long recipients hold before selling. Demand also depends on the macro environment and it's historic correlation with other markets. Supply depends on the issuance rate and energy prices (higher prices will force miners to sell more to pay for their operations). Many other factors are at play; by predicting them you can make guesses as to future supply and demand and future bitcoin prices.

whatshisface 4y ago
How is there scarcity in Bitcoin when 1, 1000, or 10⁷ Satoshi can all serve the purpose of sending one dollar overseas? I have never understood how supply and demand can work for currencies.

fleddr 4y ago

That's not what fundamentals means in crypto. Fundamentals in crypto are existential, favorable qualities of a token that can survive severe downturns (bear markets, depressions). For BTC, fundamentals are absolute scarcity combined with buy-in/popularity. For ETH, fundamentals are utility/flexibility and network effect. For HorneyDonkeyKongCoin, fundamentals are...none. It will go to zero and never come back.

JumpCrisscross 4y ago
> For BTC, fundamentals are absolute scarcity combined with buy-in/popularity This is literally the opposite of the meaning of fundamentals. Absolute scarcity is meaningless; in classical economics, everything is scarce. And popularity are animal spirits.
- darkerside 4y ago
  Sometimes words have different meanings in different contexts.
- fleddr 4y ago
  Well, words can have different meanings in different contexts. This IS what fundamentals means in the world of crypto. You don't decide on the value of a scarce asset, the owners of the asset do. If you personally believe the nominal value of a scarce asset like BTC is meaningless and thus zero, short it.
  - JumpCrisscross 4y ago
    > words can have different meanings in different contexts I agree. It's just convenient that fundamentals, by this definition, always equals the market price. At which point one asks why there are two words other than for misdirection.