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The way to combat this is with arithmetic. Calculate out "if Bitcoin reaches $2000, what would its market cap be? How many people are actually using it? Can
by sillysaurus3 13y ago
The way to combat this is with arithmetic. Calculate out "if Bitcoin reaches $2000, what would its market cap be? How many people are actually using it? Can it possibly be worth that much per user?"
It paints a pretty grim picture for Bitcoin achieving even a 5x boost over the past peak, at least for years to come.
- driverdan 13y agoThere are far too many unknown variables to calculate that. You don't know how many people would be using it to push it to $2000. You won't know what the market cap would be until that price is reached.
- nostrademons 13y agoThat was my reasoning for not getting into Bitcoin in a big way during the hype cycle. It's incorrect, though. The best case for Bitcoin is that it becomes the global reserve currency, in which case your dollars are worthless and it makes sense to exchange any number of dollars for Bitcoins now before the dollars become worthless. IMHO this scenario is pretty unlikely, but it shows the difficulty of doing fundamental analysis on currencies. Currencies are based entirely on confidence; they are, by design, intrinsically worthless. (Gresham's Law dictates that any currencies with intrinsic value tend to get driven out of circulation and cease to become usable currencies.) So the only facts that matter when evaluating them are the attitudes of the population towards them. This is why ForEx speculation is usually likened towards gambling; it's pretty much impossible to make a sane rational analysis of their value.