[davidmanescu]

To me an asset that moves 15% in a day, and which no-one knows what it's truly worth, isn't great as a store of value. I'm not going to speculate about where bitcoin will be trading when it becomes a stable, useful asset, but in order to justify a market cap anywhere near this high it will eventually need to generate actual utility for its users. Can someone explain where that will come from? Cheap currency conversion and easy money transfer?

[tinco]

Gold, art and wine all have a utility value that's way below their "store of value" value. Bitcoin is just a more convenient store with an equally insignificant utility value. Whether Bitcoin can persist while offering so little value I don't know, just saying these valuations are not unheard of in the asset world.

Just look at what people pay for mediocre Van Gogh paintings I wouldn't hang in my toilet..

[rhino369]

It's hard to objectively value things. But bitcoin is a clear outlier because it's only value is that people think it's going to go up in value. It's more like beanie babies than a Van Gogh.

Wine price is generally determined by the genuine demand for the wine. Art less so, but still people actually want to hang the art somewhere. Some people speculate with art, but it's not a huge percentage of the value.

Gold is the closest, but it's still a mile apart. First, there is genuine demand for gold for decorative purposes. But there is a large demand for gold as a store of value.

There are two key difference between bitcoin and gold. Gold has a very long track history of reliable demand. All of history it has been valuable. It is seen as a safe bet. But the bigger difference is that gold isn't purchased on the expectations of massive growth. Gold isn't supposed to MOOOOOON. It's just supposed to be steady. Sometimes gold is over priced, but demand is steadish.

Bitcoin only has any value (beyond the negligible trading value) because a bunch of baghodlers think bitcoin will be work tens of thousands of dollars eventually. Why do they think that? Because it's gone up a lot in the past? There is no "there there." If people start to wonder if bitcoin will ever go up, it will crash.

[tinco]

Wine prices, gold price and art prices are all driven by genuine demand for them. Why would something have a price if there wasn't genuine demand for them?

What do you base the idea on that only some of the price of art is based on speculation?

I don't think Bitcoin is an outlier at all. And if you don't believe Bitcoin is an outlier, as many people are starting to do now, you can understand why its price is going up so fast.

Gold prices don't do anything because they're "supposed" to do anything. Gold moons whenever the market decides it wants gold to moon, just like Bitcoin, just like wine and just like art.

[noitsnot]

I'm so tired of people trying to validate and prop up cryptocurrency with horrible comments and logic. Hanging a mediocre Van Gogh above your toilet? Unbelievable.

[tinco]

Where would you hang this one?

https://d32dm0rphc51dk.cloudfront.net/ujCq3y5qVUrIyPCG-M_v3w...

Don't get me wrong, he has a lot of pretty paintings too. Definitely some I'd pay upwards of $500 for to hang in my living room.

[feriancek]

Check out this chart: http://charts.woobull.com/bitcoin-nvt-ratio/

"NVT Ratio (Network Value to Transactions Ratio) is similar to the PE Ratio used in equity markets."

The NVT is currently high, but not out of control like it was in 2014. This is the best dataset I've seen for working out if the network is actually being used in a way that matches the valuation, and I think will become invaluable when the CME Bitcoin Futures market opens.

[davidmanescu]

PE ratios correlate highly to dividends for shareholders. Does holding bitcoin have a way of compensating you when the transaction count increases?

[ihsw2]

It may be some time until $100M of daily churn doesn't result in a 15% price swing. The market capitalization of BTC would need to increase considerably to accommodate such a scenario.

And it looks like we are quickly approaching such a scenario.

The rich (and super-rich) have a lot of resources to move markets and BTC is currently especially susceptible to this.

[davidmanescu]

Indeed. I guess volatility like this isn't a dealbreaker for other asset types so it shouldn't be here. Just seems odd that we call it a "currency" when these things happen routinely.

[ringaroundthetx]

> To me an asset that moves 15% in a day

Perhaps the biggest derivatives house on the planet announcing that they are going address the specific concern makes it more useful? Because your exact rebuttal won't exist anymore.

CME Group is offering futures and options.