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http://en.wikipedia.org/wiki/Greater_fool_theory http://en.wikipedia.org/wiki/Greater_fool_theory
by michaelochurch 13y ago
http://en.wikipedia.org/wiki/Greater_fool_theory http://en.wikipedia.org/wiki/Greater_fool_theory
- deleted 13y ago[deleted]
- awt 13y agoDoesn't this theory also apply to a stock traded on a stock market? edit: reading the wiki article, I see that it indeed can. The assumption being that there is no rational justification for the price paid. However, this assumption is wrong. Simple calculations give a price much higher than the current value if Bitcoin comes into widespread use as a currency. In more detail, given the limited supply and any arbitrary transaction volume, you can come up with a price for Bitcoin. The current valuation is not supported by the transaction volume. However, low estimates of transaction volume if Bitcoin comes into widespread use imply a much higher price.