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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?
by RivieraKid 3y 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 3y 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 3y agoThe 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 3y agoThe 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 agoIt 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.