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You may know what the Bitcoin protocol dictates, but Bitcoin protocol has little to do with its value. It is worth what people will pay for it. You don't know h
by D13Fd 4y ago
You may know what the Bitcoin protocol dictates, but Bitcoin protocol has little to do with its value. It is worth what people will pay for it. You don't know how much or how little people will be willing to pay for it tomorrow, and that number varies rapidly. That's not a property I'd want in a "store of value."
- danuker 4y agoIndeed, demand is the biggest risk in owning crypto assets. Here are what I believe the largest factors that influence demand: - liquidity (depends on, say, GDP and national currency supply) - network effects (it's easier to use Bitcoin if more people are using Bitcoin, because more services and trading partners pop up etc.) - amount of "speculators" - people buying because the price went up recently. They are betting on momentum. - amount of "true believers" - people seeing the value of the protocol, and sticking through crashes or betting on mean reversion.