| > I mean, it can't? The "price" is literally defined as the price of the latest trade. Check out how an order book works: https://en.wikipedia.org/wiki/Order_book. I'm referring to the bid and the ask price. These often do differ substantially from the last trade price, and represent what someone is willing to pay to buy or receive to sell the asset right now. These can move without any trades actually being made. The price you are referring to is the last price. But the broader point is that the market cap can move much faster or slower than the total traded value. It would not take exactly a 1 billion dollar buy order to move bitcoin price up 1 billion dollars in market cap, it would probably move much more than that. Same thing for stocks. So your assumption that the total cap of something represents exactly that many dollars being put in by investors is wrong, in general it will be far fewer dollars put in. > The mistake you are making here is the assumption that there is a "value" in a bitcoin that can change. I'm making the assumption that the value of a bitcoin is the price someone is willing to pay for it, which is supported by the evidence of what a market actually does pay for it. I tend to base my understanding of the world based on things that can actually be measured and that I can verify. You are asserting, may I add without any evidence, that its value is actually zero. I would challenge you to try to give a definition of "value" that is actually measurable, and that can lead to meaningful predictions about the world. Even if you had a perfect god's eye view of the "real value" of every asset, you'd still have to account for human behavior the irrationality of markets. > This is not true for bitcoins. They do not represent anything, there is no ownership of anything but the bitcoin itself. It only has value inasmuch as it can be traded. Your argument that value is only real if it represents "real" ownership would seem to imply that cash settled derivatives markets, which are some of the most liquid markets there are, also have zero value because they don't actually represent ownership of anything and are merely trading instruments. Similarly, cash itself, by your own logic, would have zero value, as it does not represent ownership in anything. |
And, again, mathematically, bitcoin trading is negative sum. This has nothing to do with what the price is. It can go up, down, or stay the same. The game is still negative sum in the end.