4 ms·

This may just be me being cynical, but any attempt to convert any significant about of Bitcoins to anything real will collapse the price further.

FollowingTheDao 4y ago
No, you are not cynical, you are spot on. Crypto gains are worth nothing until you change it into currency. The same is true for stock gains. Crypto gains only were people imagining money into existence. This is the problem of going off the gold standard.
- senttoschool 4y ago
  >No, you are not cynical, you are spot on. Crypto gains are worth nothing until you change it into currency. The same is true for stock gains. Actually, stocks are slightly different. Because stocks are based on an underlying real company producing real services and goods, it's worth something even if you don't sell it. This is because stocks can pay dividends or do buy backs. Crypto does not pay dividends or do buy backs. If they do, they should be classified as a security.
  - FollowingTheDao 4y ago
    > Because stocks are based on an underlying real company producing real services and goods No, they are not. Stocks prices are solely based on their supply and demand in the market. Products and services may play a role in the demand fro the stock, but they are not the sole determinate of price. Take AMC for example...
    - wyatt_dolores 4y ago
      Stocks do have a natural lower bound which is the actual value of the company.
      - FollowingTheDao 4y ago
        Are you saying Bitcoin can go negative?
        chollida1 4y ago
        it's possible if the carrying cost of BTC is positive.
      - medvezhenok 4y ago
        The total stock of a company, yes. Your particular share - not necessarily. You could get diluted to pretty much nothing if the company chooses to issue more shares. Shareholders can usually push back via voting, but depending on the way the company is setup they could still successfully dilute smaller shareholders.
    - senttoschool 4y ago
      Stock prices are based on supply and demand. But a stock is the ownership of a company, which produces goods and services.
HPsquared 4y ago
The same is true for any asset, including gold or real estate.
- mrweasel 4y ago
  Gold does have real world applications, you can build stuff with it, but yes, if only using in electronics the price would crash. Real estate, depending one the type can generate money by being utilized, it doesn't need to be traded as such.
  - ashwagary 4y ago
    >but yes, if only using in electronics >it doesn't need to be traded as such. Only a small percentage of sellers can convert an asset into the current dollar price in every market, regardless of where the underlying is used. This is true for every asset. Once supply outpaces demand, price moves down.
  - tomputer 4y ago
    This is exactly what makes Bitcoin a fantastic store of value. Bitcoin supersedes gold because compared to gold, it has no other use. If Bitcoin would be used as a store of value instead of gold, gold can be used for other material purposes for a lower price. The same goes for real estate. A house does not have to be an investment asset or store of value. If (institutional) investors would use Bitcoin instead of housing, it could make housing affordable again. Or at least result in more fair/realistic housing market instead of the propped up market from the last few years. Compared to gold and real estate, Bitcoin is a scarce asset that can easily be divided into small pieces. It has a liquid market and can be exchanged 24/7 anywhere in the world.

FollowingTheDao 4y ago

No, you are not cynical, you are spot on. Crypto gains are worth nothing until you change it into currency. The same is true for stock gains. Crypto gains only were people imagining money into existence. This is the problem of going off the gold standard.

senttoschool 4y ago
>No, you are not cynical, you are spot on. Crypto gains are worth nothing until you change it into currency. The same is true for stock gains. Actually, stocks are slightly different. Because stocks are based on an underlying real company producing real services and goods, it's worth something even if you don't sell it. This is because stocks can pay dividends or do buy backs. Crypto does not pay dividends or do buy backs. If they do, they should be classified as a security.
- FollowingTheDao 4y ago
  > Because stocks are based on an underlying real company producing real services and goods No, they are not. Stocks prices are solely based on their supply and demand in the market. Products and services may play a role in the demand fro the stock, but they are not the sole determinate of price. Take AMC for example...
  - wyatt_dolores 4y ago
    Stocks do have a natural lower bound which is the actual value of the company.
    - FollowingTheDao 4y ago
      Are you saying Bitcoin can go negative?
      - chollida1 4y ago
        it's possible if the carrying cost of BTC is positive.
    - medvezhenok 4y ago
      The total stock of a company, yes. Your particular share - not necessarily. You could get diluted to pretty much nothing if the company chooses to issue more shares. Shareholders can usually push back via voting, but depending on the way the company is setup they could still successfully dilute smaller shareholders.
  - senttoschool 4y ago
    Stock prices are based on supply and demand. But a stock is the ownership of a company, which produces goods and services.

HPsquared 4y ago

The same is true for any asset, including gold or real estate.

mrweasel 4y ago
Gold does have real world applications, you can build stuff with it, but yes, if only using in electronics the price would crash. Real estate, depending one the type can generate money by being utilized, it doesn't need to be traded as such.
- ashwagary 4y ago
  >but yes, if only using in electronics >it doesn't need to be traded as such. Only a small percentage of sellers can convert an asset into the current dollar price in every market, regardless of where the underlying is used. This is true for every asset. Once supply outpaces demand, price moves down.
- tomputer 4y ago
  This is exactly what makes Bitcoin a fantastic store of value. Bitcoin supersedes gold because compared to gold, it has no other use. If Bitcoin would be used as a store of value instead of gold, gold can be used for other material purposes for a lower price. The same goes for real estate. A house does not have to be an investment asset or store of value. If (institutional) investors would use Bitcoin instead of housing, it could make housing affordable again. Or at least result in more fair/realistic housing market instead of the propped up market from the last few years. Compared to gold and real estate, Bitcoin is a scarce asset that can easily be divided into small pieces. It has a liquid market and can be exchanged 24/7 anywhere in the world.