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Bitcoin and most other cryptocurrencies are not producing any product, collecting any interest, etc, with which to buyback or pay dividends. As such, investment
by kerkeslager 2y ago
Bitcoin and most other cryptocurrencies are not producing any product, collecting any interest, etc, with which to buyback or pay dividends. As such, investment in Bitcoin is a zero sum game: in order for you to make money off Bitcoin, someone else has to lose money on Bitcoin. As such, if you don't have a solid understanding of cryptocurrencies, and perhaps more importantly, market principles, you probably shouldn't buy cryptocurrencies because the odds are against you given you're playing this game against some very large, powerful, expert players.
It's actually worse than that because it's being diluted (albeit slowly). The only way around this is for more and more money to be invested in Bitcoin, forever, which obviously isn't sustainable, at least not at historical rates of growth. If world GDP continues to grow, Bitcoin can continue to grow by sucking up that growing value, but that's limited, ultimately by GDP. And there's a limit to how much of GDP people will be willing to put into Bitcoin: for example, 100% of corn farmers aren't going to take their profits from farming corn, and stop putting them into the next year's corn crop to buy Bitcoin instead, because the more corn farmers did this, the higher the price of corn would go, so at some point it would become obviously more profitable to farm corn than buy Bitcoin.
It is quite possible that we will continue to see new all-time highs for Bitcoin in the next few decades--there's still lots of wiggle room between global GDP and Bitcoin market cap. But Bitcoin growth will slow to less than GDP growth at some point. It's simply impossible for that not to happen.
- npoc 2y agoYes, at some point bitcoin will stop growing in value, I'll agree with that. Personally I think it will be at a market cap of $100T-200T (in today's dollars), but time will tell. If you measure its value relative to dollars though, it will go up forever and faster than GDP (dollars are historically devalued by money supply inflation at 7%/year)