3 ms·

This doesn't really make sense. Bitcoin is deflationary but the market cap has no ceiling, it's just based on what people are currently willing to pay for a coi

• RivieraKid 2y ago
  Bitcoin's market cap can't grow faster than world wealth perpetually. S&P 500 can and has consistently done so. Does it make sense now?
  • nwiswell 2y ago
    > perpetually Is this a fun thought experiment, or are you immortal? You may be shocked to learn that GDP growth can't continue perpetually either, under reasonable assumptions: https://arxiv.org/ftp/arxiv/papers/2005/2005.05244.pdf https://arxiv.org/ftp/arxiv/papers/2005/2005.05244.pdf
  • robjan 2y ago
    The market cap is just the last price multiplied by the number of the asset in existence. There is no restriction on last price for either SP500 or bitcoin.
    • RivieraKid 2y ago
      The restriction is that Bitcoin can't grow faster than total wealth forever. I.e. you can't grow total wealth by 3% and grow Bitcoin by 4% forever.
      • robjan 2y ago
        It can. The misconception that people generally have is believing that purchasing securities is a zero-sum game when in fact it's generally a positive sum game. When you buy a bitcoin (or security), the money you spent doesn't disappear so the amount of bitcoins and fiat in circulation do not change as a result of this trade. There's nothing stopping a bitcoin from being worth a million dollars or a dollar being worth a million bitcoins, it's just a function of supply and demand.