[chadash]

Not OP, but also a skeptic and here are my thoughts:

- Market cap is sort of a misleading stat. Microsoft's market cap is ~1.75 trillion, but it's p/e ratio is 34. So if they stopped reinvesting in their business, I'd be making 3% yearly on that investment with a hedge against inflation since they can just raise prices. A lot more goes into their valuation than that, but my point is that even if you are a huge skeptic of Microsoft's current valuation, the company is still worth a ton of money. I don't have a number, but I'd imagine that at $500 billion, pretty much every investor on the planet would think that Microsoft is a crazy steal. On the other hand, bitcoin's value is based on perception of its value and nothing else. The fact that some people are willing to buy in at $50k doesn't mean that every investor on the planet would think that bitcoin is a steal at 10k. There'd still be plenty of people who consider that price to be way to high as well. Since market cap is determined entirely by people willing to pay the most, it's hard to say what market cap means for something like bitcoin.

- I agree that there comes a point in time where even a skeptic has to give in. BTC really started to explode about 3 years ago. For me, that's just not enough time. Subjectively, after 10 years at reasonably high values, I'd probably have to reconsider, assuming it gets less volatile over time.

- The volatility is the main concern for me. Gold had a low around 100 and a high close to 200 in the past year of craziness, so it almost doubled. BTC went up about 10x from it's 2020 low to its recent high. Even Zoom and Peloton are only up ~4x from a year ago and this pandemic has fundamentally changed their businesses. I think if BTC got to a point where it didn't change more than 25% value in a year with a normal-ish economy, I'd have to reevaluate.

[tcoff91]

By the time the volatility is gone so is the opportunity. Bitcoin would need to expand its userbase massively to be stable. Stability can't happen unless the price goes up massively.

[vmception]

wow you have so many conflicting views, irrelevant comparisons between two types of markets and asset class, and don't seem to realize it?

equities markets cant be compared to a commodity. so that invalidates your entire first paragraph, the longest one. as a corollary to that, don't derive your confidence from equities investors opining about commodities for the first time in their lives. you have equities investors that never traded tech and never traded commodities talking about bitcoin, you cant call that insight. bitcoin is looked at in market cap terms because it has a more transparent supply than any other commodity. this is completely new to the universe of assets and the market likes that. it removes a risk with gold, oil, etc.

paragraph two and three: you want high price for a longer period of time, but are turned off by the exact and only mechanism in which it gets there - large % and large $ amount price increases. fascinating.

more tech equities comparisons. mmmmk

I’d like to leave you with an alternative tool for valuing, and its just scarcity. if thats not good enough for you, then just stay out of the market. retail investors en masse never got married to commodities markets for the exact reason that they are not buy and hold outside of some metals. volatility is not controversial in the commodities markets, its termed as seasonality, as supply and demand ends up having a frequency in some markets. A lot of the equites market style comparisons to bitcoin is because it started with retail (non-institutional) who never traded anything else. But don't be like them. Bitcoin’s not a company so dont use company comparisons.

[chadash]

> commodity

It's not really a commodity. More of a currency.

> you want high price for a longer period of time, but are turned off by the exact and only mechanism in which it gets there - large % and large $ amount price increases. fascinating.

I'm not saying it's worth nothing. If bitcoin stays above 5k for a long time, i'm willing to say it's worth at least 5k. If it stays above 50k for a long time, i'll come around and say it's worth at least 50k.

> I’d like to leave you with an alternative tool for valuing, and its just scarcity.

Scarcity alone doesn't mean anything. I can create a cryptocurrency any time that's scarce. Doesn't make it valuable.

> Bitcoin’s not a company so dont use company comparisons.

The only commodity that it is comparable to is gold and maybe a few other precious metals that serve as value stores. And gold, for one, has held high value for thousands of years. Maybe it doesn't have intrinsic value in the way that canned beans do, but the chances of it being near worthless tomorrow are very very low since it has a 5000+ year track record. On the other hand, yes, there's seasonality and volatility in things like oil and pigs, but there are also real world use cases for those.

[vmception]

scarcity and liquidity then?

there’s nothing wrong with low float assets, really seems like you are making a separate higher standard for bitcoin

yes all cryptocurrencies inherit that capability to an extent, just have to convince others to share the same view, with the security of the database becoming the limiting factor

the future value of bitcoin are the drivers of its scarcity, if all of those drivers are too intangible for you then they wont become so

[chadash]

> scarcity and liquidity

So it's valuable because it's scarce and it's liquid because it's valuable? I imagine you can see how a skeptic might view this. I would be skeptical of gold coins too, but for the fact that a gold coin today would have been valuable in ancient Rome as well. So I don't really understand why gold is so valuable, but the fact that it's been very valuable (to varying degrees) for 5000 years leads me to think that that will hold for at least for the rest of my life.

I agree that Bitcoin has advantages as a store of value over gold. But it's value is only as high as people value it for, so the trillion dollar question is whether it's just a fad. For those of us who are skeptical, there are definitely things that could bring us to the other side, such as sustained value for a longer period of time.

[vmception]

interest in bitcoin can completely evaporate, and the same is true for gold.

you needed to hear it, so there it is. having more bitcoin than you need isn't for you, owning bitcoin when you don't need it isn't for you.

the reasons people own bitcoin are all of the reasons people own gold and more. it inherits the same sentiment and does it better. do with that what you will.

just remember that the oft cited tulip bubble and the beanie baby bubble are not examples of irrational behavior. Tulips was a derivatives contract discrepancy that ended in a few months after the bubonic plague killed the traders, the spot market was unaffected and we dont know what would have otherwise happened. Beanie babies had accurate proce information from expected permanent supply chain failure, which ended from a surprise supply increase flooding the market. Only the equities bubbles were irrational.

[graeme]

> equities markets cant be compared to a commodity.

But BTC advocates do so all the time by using an equity markets term, market cap. As far as I know that isn’t a term applied to commodities.

Also commodities have a use value. In what way is bitcoin a commodity?

[vmception]

they shouldn’t either. and I address that.

bitcoin’s use value is what it brings to the market that people like and dont have elsewhere. transparent supply and emission schedule, 24/7 trading, faster settlement times, borderless self-custody in unlimited amounts, upgradable asset class with some attributes of multiple asset classes (commodities, currencies).

let me guess, you were looking for industrial applications and drastically undervalue speculation as a use value?

[philosopher1234]

What is the use value of speculation? It doesn’t seem useful to me. The problem I have with Bitcoin is I have no confidence in its demand. For all I can tell, tomorrow people could get bored of Bitcoin and it would plummet. There doesn’t seem to be a good reason, beyond hype, to want to own Bitcoin.

[mattm]

> if BTC got to a point where it didn't change more than 25% value in a year with a normal-ish economy, I'd have to reevaluate

You could probably cherry-pick some dates between Q2 2018 and end of 2019 that would come pretty close to this criteria.