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> A commodity is only worth what someone will pay for it. It would be impossible to offload 1M BTC at the market mid (currently $962) so it seems ridiculous to
by lazyjones 13y ago
> A commodity is only worth what someone will pay for it. It would be impossible to offload 1M BTC at the market mid (currently $962) so it seems ridiculous to value Satoshi's bitcoin wallet at $1B.
Conversely, it seems unlikely that e.g. Google's shares would be worth the current market cap if they were all sold at the same time. But we still accept the current share price as a basis of e.g. Page and Brin's net worth, so we should also accept Satoshi's wallet's current value (even if it fluctuates more than typical stock prices).
- army 13y agoThere's a far stronger floor though on the price for Google shares, given that they're a very profitable company with good future prospects. The share price doesn't have to drop too much before it starts looking like a bargain to the many deep-pocketed stock market investors out there. With Bitcoin the value is so speculative at the moment that I think, if anything, a sell-off that large would trigger a self-sustaining run on Bitcoin.
- fragsworth 13y ago> Conversely, it seems unlikely that e.g. Google's shares would be worth the current market cap if they were all sold at the same time. Not really true. Google's shares have a value that is based mostly on analysis of expected value. If they offloaded a bunch of their shares at once, the analyzed value wouldn't change, so the market would only crash for a very short time while everyone else realizes Google is a better deal than their other stocks. There is no revenue from Bitcoin, on the other hand. Much like gold, its value is almost entirely based on speculation, but with some added value on account of people needing to buy a little bit to do certain things. The market cap of Bitcoin is not based on anything tangible.