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by tinco
3155 days ago
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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.. |
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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.