[m3kw9]

If bitcoin price is derived from the bid ask, most of the worlds money would have to be parked in bitcoin, does that even make sense?

[jjeaff]

"parked"? No, since no real money or asset is held to back up bitcoin. It could go to $100 million tomorrow based on a few transactions, but that wouldn't be indicative of what anyone else will be able to get for it.

[celticninja]

Now that is just wrong. If the price went to $100m tomorrow it is because people are buying and selling bitcoin for that price.

[astrodust]

All it takes is a single trade at a $100M valuation and, for that nanosecond, that's the value of Bitcoin.

[celticninja]

Yes but no one really considers that to be the market price.

[jjeaff]

Yes, the exchanges would, at least until a bunch more lower transactions took place.

[vinceguidry]

Money supplies are constantly inflating, every financial instrument can be looked at as a form of money, and quite a few of them are actually considered to be money, such as treasuries and traveler's cheques. According to Wikipedia, the broadest measure of money supply currently in use was 10.5 trillion, in 2013.

That cryptocurrencies are not currently considered to be money by the world economic order, it goes into a much broader range of financial assets like stocks and bonds. The S&P 500 market size reached 19.6 trillion USD in 2016

Bitcoin has a lot of room to grow before it even comes close to playing in that league. Everybody on HN should be buying crypto right now, the upside is that huge.

[john_moscow]

Except it isn't parked in any way. The money goes from the hands of the optimistic buyers into the hands of those who decided to cash out just now. The only asset "backing" Bitcoin is the people willing to buy it.

[fjsolwmv]

It's weird to complain that because btc is backed by no set, it it not really worth it's process in USD, which is also backed by no asset.

USD is backed by "the full faith and credit of the US government". BTC is backed by the Internet and meme magic.