> Here's hoping. When stocks tank, one can decide if a company is undervalued and decide whether to buy in.
Even those stocks that underwent the SPAC route that also offer no dividends and are beyond loss making to the point at which they will be delisted?
I don't see how SPACs that aren't making any money like $BZFD or $NKLA are any better than Bitcoin.
Let's hope these shady SPACs don't start repeating the ills of other non-SPACs as the tide turns bearish by losing $1B mysteriously like Wirecard or fabricating your financial reports which Luckin Coffee did.
Bitcoin has value for the same reason Visa has value.
A medium of exchange is a tool, and tools people use have value.
I grant the majority of the market is speculation but many of us actually regularly use Bitcoin for things like payroll, settling debts, cheap international value transfer, buying coffee, and for cash-like privacy for online purchases.
For those like me that have been continually buying, saving, and spending bitcoin for a decade, vs simply speculating, dollar cost averaging kicks in. Even 300% price swings do not matter all that much in the long run.
Those that go all-in short term looking to gamble get wrecked, but that is often the case in trading. Bitcoin will be healthier when the short term traders are forced out.
> Bitcoin has value for the same reason Visa has value.
No. Visa has contracts, offices, and cash. They have over $81B in assets, over $12B of which is cold hard cash.[1]
Visa also has employees who know what they're doing. Bitcoin has cryptocurrency industry people working on its behalf. It's not the same thing.
Bitcoin has people and companies invested in it (emotionally and financially). Visa has almost a hundred billion dollars in assets, and the market believes they'll be able to make even more (hence the almost $400B market cap).
Visa's market cap is just 4-5x its current assets.[2]
Bitcoin has no assets. It's just speculation. It can't be liquidated even in theory.
> You can't just compare bitcoin to a corporation and get something that makes sense.
1) I agree. I was replying to a comment that did.
> Cash just as well "has no assets".
2) USD is backed, ultimately, by the full force of the nuclear armed state and multiple branches of the biggest military the world has ever seen. If you think the US government will allow USD to become irrelevant then you are going to be very disappointed. Bitcoin has no such thing.
I know. And the USD is not just backed by the military. War is just diplomacy failed.
It's just the most obvious backing.
It's enough to send fines, most of the time. Actually just the threat of fines. If foreign then diplomatic carrots and sticks.
I'm commenting on the absurd notion that the USD is backed by nothing, commonly said with "but BTC is backed by math".
You're right. Mushroom clouds won't help the USD. But the implication of it helps.
Actual acts the US does are more subdued. Overthrow democracies and invade smaller countries.
But could the US do it if it had no nukes and a military the size of Mexico's?
The US even buys support, including keeping USD the medium of exchange (thus creating USD demand, thus giving USD value) including be providing military guarantees.
Russia and China have great militaries too, but the US is a league of its own in its ability to apply it anywhere on the globe.
Russia does not.
The reason the US (and USD) has been winning is, as I'm sure you'd agree, a complex and huge topic full of not just strategy but also history. But it doesn't change the fact that without the US military and its ability to project it worldwide it would be MUCH weaker.
Russia lost 50 million people in the war, at a time when the US was sitting as pretty the only major country not blown to bits, and it was holding the IOUs.
No one said that USD is going anywhere. As you pointed out for bitcoin, the people who work on or invest in bitcoin are not part of the asset. This is the same for USD also. Visa equity is the most different amongst the three.
Visa has value (on top of it's utility) because it is able to take a 1-3% cut of all payments that use the visa network.
Suppose bitcoin gave the equivalent utility as visa but for negligible fees. In this world, you would have the same utility for a lower cost, and the equity value of Visa would conceivably go to zero. My point is that converting utility to value depends on the ability to monetize something. If there was somehow a screw monopoly, I'm guessing the "value" of screws would go way up even with fixed utility. This of course was also true when the cost of producing a screw was much higher in the past. Technology is deflationary.
I don't know what the value of bitcoin should be (nor do I think it has comparable utility to visa), but we are undoubtedly in world where too much value is extracted from financial services relative to the utility that they provide. I think that will be disrupted, but have no idea what, if anything, will be valuable after it is disrupted.
Using this logic, we can value 1 bitcoin at 7/1700* 442billion /21 million = 87$ (Bitcoin Tps divided by Visa TPS times first visa market cap I found divided by number of Bitcoins ).
Except if course, if you buy a piece of visa, you get a dividend and legal rights, while owning a Bitcoin gets you the privilege of paying miners to extract that value. So really, that 7/1700*442e9 $ is the value of those who own the network (the miners), not the users.
The miners have no incentive to mine unless there are a large number of people choosing to exchange Bitcoin giving it buying power to offset electricity cost.
I run a high-risk security and applied cryptography consulting firm so naturally most of my clients are in the crypto-asset industry. Multiple offer payroll in crypto-assets to all staff, and one pays all employees in it exclusively to avoid hires that do not have an interest in the space. I pay most subcontractors in Bitcoin too.
Unlike paying in company stock you do not deal with nonsense like AMT or blackout periods.
I for one am thankful for the regular clients that pay me in crypto-assets, and wish all would. It saves me having to buy from exchanges. Makes for an easy dollar-cost-averaging strategy too.
Money is kind of like that; it's a delusion. The problem is something is always breaking that delusion by printing more of it. But not everything can be printed. If you can't print, the delusion can be pretty hard to break. If the delusion is never broken, it's actually a good thing to use as money.
You shouldn't have your wealth stored in a medium of exchange, while expecting capital appreciation exceeding or even comparable to the equity market. That kind of volatility is a sign of there being something seriously wrong with that medium of exchange.
Storing wealth in an -inflationary- asset like fiat currency is a stupid move, I grant. I store value in a mix of fixed quantity or -deflationary- assets that are useful or interesting to me like art, vehicles, real estate, and yes... crypto-assets. The latter is perhaps the most volatile but also has the highest liquidity, is fireproof, can be traded for other assets anonymously, etc. Tradeoffs.
> Bitcoin has value for the same reason Visa has value.
I disagree, Visa has value because it is a company that earns profits, ~$10B in FY 2021 ($5.xx per share, 2B shares outstanding)
Bitcoin is not a company that earns profits, so any value ascribed to BTC cannot be for the same reasons Visa has value. In fact, BTC has zero intrinsic value.
Visa has also has value because it adds trust to the system. You can contest your charges and a lot of the fees go towards keeping that trust. Credit cards have tons of abuse but it’s backed by a level of insurance. I stopped using crypto because the fees were so high, it wasn’t simple (unless you use an exchange) and doesn’t come with that trust. Even the exchanges themselves fail because they are gambling with customer cash essentially. It’s like if my bank decides to put all the cash it was holding for me into Iraqi dinar because it has a feeling it was going to go up.
As a medium of exchange, the price of one bitcoin should be kind of meaningless. As long as you can quickly do the transaction and cash out on the other end, it shouldn’t really matter if BTC IS $100 or $100,000.
As a lower bound it would need to be high enough to support the largest supported transaction. If the market cap of bitcoin was only $100, you could not transact $200.
Even those stocks that underwent the SPAC route that also offer no dividends and are beyond loss making to the point at which they will be delisted?
I don't see how SPACs that aren't making any money like $BZFD or $NKLA are any better than Bitcoin.
Let's hope these shady SPACs don't start repeating the ills of other non-SPACs as the tide turns bearish by losing $1B mysteriously like Wirecard or fabricating your financial reports which Luckin Coffee did.