[FabHK]

> We could just as easily apply that basic logic to any security.

Not quite. An Amazon share is a claim on future residual cash flows, whose net present value constitutes the (unknown) "true value" of the share. If Amazon falls to 1/10th of its current price because of some tweet by Elon or whatever other (extraneous, fluke) reason, lots of people would be lining up to buy it, because they get a stake in an actual business that would repay them their investment within a few years. So, no, it would not reach 0 share price.

(So, while the argument in the article needs some refinement, its broad thrust is true: market cap for a publicly traded company is much more meaningful than market cap for a crypto currency.)

[nightski]

In theory it sounds so logical!

Is it though? Have you actually tried to apply this in practice to a trading strategy? I think once you start trying to predict prices based on NPV of future cash flows this quickly falls apart, even with large behemoths like Microsoft, Apple, etc...

[FabHK]

I am not suggesting that you or I can compute the NPV of future cash flows and then value the share, certainly not easily. But that was not the point. The point was to distinguish shares (and other securities) from coins: the price of the former is (softly) constrained to be within the vicinity of their intrinsic value. Cryptos have zero intrinsic value.

[mrb]

Crypto have intrinsic value: they are payment networks that work even where traditional systems fail. No denied transactions. No limits. No "account" to open. Works for the underbanked. Send money truly anytime anywhere. No other system does this. That's the value.

[nightski]

The distinction is meaningless to me. There were companies in the dot com bubble which had extremely high valuations which went bust as just one example among many. These stocks were not softly constrained at all. It was pure speculation and it happens all the time.

I don't think it is right to call growth speculation "intrinsic value". The only thing that is truly intrinsic in my opinion is profits. But profits aren't a good way to measure value of an asset. Because the asset (stock in this case) is separate from the company itself. A company could generate slim profits and not grow each year. That has intrinsic value to the employees and customers. But that does little for the stock.