LOL but that's what the market psychology is all about. Why do investors drive up AI stocks, even though all it does is plagiarize web contents and draw stupid pictures (as far as ChatGPT is concerned)? It's all about creating bubbles.
Good grief....
Blockchain is Dangerous Nonsense
- Thread starter Frederick Foresight
- Start date
Let's start from the beginning. When you try and answer the question of what money is, and look to the past for examples of everything that money has ever been, you learn that money is simply a ledger. Its a way to keep track of who owes what and to whom. A long time ago, these ledgers were actually public, on display for everyone to see.
Then its natural to want to trade what you are owed with someone else. You can of course trade the actual goods, but it became obvious that if we assign value to something else that everyone agrees on, this will be a good way to trade. Its impractical to keep updating the village ledger after all.
Some people assign value to gold, and others assign value to pieces of paper. It used to be that glass beads also had value, and if I recall properly, it was people in Africa who attributed great value to them. But the sneaky Europeans knew how to mass produce them, and so these glass beads clearly fell out of style.
We can go through all the example of things that have worked as money such as gold and silver, and we can also discuss the pros and cons of each of these, but at the end of the day, it should be clear that whatever a society chooses as money, all you're doing is keeping track of what you have, and being able to pass this value to someone else.
None of this should cause any disagreement, and if we can agree that its makes sense that money is more or less just a ledger, then what better ledger is there right now in this technological era that no single entity, or corporation, or government can scam?
The only reason we assign value to paper bills is because we know someone else will understand the value it has, and if they accept this paper, they will be able to trade it in for something else at a later date. This works exactly the same way for gold. Paper bills are nice because they are easy to carry and divide, but clearly can be mass produced and hence devalued. Gold is nice because it can't be mass produced, but its not easy to carry or transact with. Each have their strengths and weaknesses, and its actually quite intuitive to most people what these properties are.
But there is clearly a much better ledger today that has all the properties of paper bills and gold, and adds on even a few more properties that have never been available before.
This is actually the best and most reasonable answer from a non-Bitcoiner
Demand, or more specifically, future demand, or TradFi calls it TAM (total addressable market)
A global money, an internet money that settles without counterparties, money that can be accepted by a street vendor in Thailand or a coffee shop in Switzerland or a real estate tycoon in Dubai or a Lebanese carpenter...
Current estimate 150M people in the world own bitcoin, TAM is 8 billion
60 million millionaires, not even 1 bitcoin available for each of them
Corporations like Microstrategy non-stop buying billions of $ worth of bitcoins
Now, bitcoin ETF's are voraciously gobbling up bitcoins, the thing about passive investments like ETF's, they are brain-dead automated, money comes in, they buy bitcoins no matter what
But you know what, Cathie Wood Ark Invest already did a breakdown of TAM for different investment markets that will demonetize, but I'm sure you read that report since you started a thread on it, right?
Here's the chart of that breakdown from last year
Future demand for bitcoins, you say where it's going to come from? My friend, we have not even scratched the surface of this demand
Bitcoin will go to $1M by 2030 and will not stop there
We just don't want you to think we're crazy Bitcoiners if I tell you bitcoin is going to $10M, $100M and higher but granted maybe after we have passed on, hence MULTI-GENERATIONAL WEALTH
In less than a month, the spot bitcoin ETF's (ex-gbtc) are about to flip the MSTR bitcoin holdings $8 BILLION
less than a month.... let that sink in... prolly nothing...
credit to @dotkrueger on Twitter
And I imagine the rise to be faster and faster? We are also only looking at this from the perspective of bitcoin flipping gold for market cap, or sucking the premium out of real estate. But lets not forget that the government is actively killing the economy and currency. Powell just this Sunday said explicitly that governments need to stop spending, and yet we are gonna do at least another 2-3T in deficit just this year. And lets also not forget that so much debt is short term and needs to be rolled over very soon at these much higher interest rates. So never mind people finding bitcoin on their own... I think governments will push everybody into bitcoin.
And this won't be like a GME or AMC short squeeze. There is clearly a limit to how high a stock can be pushed, both because it has to be tied to some fundamentals like sales, but also because it operates on regulated markets. But with bitcoin, there is no metric to say what is too much. A P/E ratio might seem extreme for a stock, but at 1M per bitcoin, that is only about twice the market cap of gold, and its not like gold is a big player as an asset class in relation to equities or real estate anyway.
So I clearly see the path for bitcoin to flip gold, and then its just getting started. Imagine every real estate investor learning that RE is now a shitty investment and needing to get out. If you sell just 1 million dollar property, that would be like 20 bitcoins today. After the halving, there will only be 450 bitcoins mined every day, which means only 20-25 houses per day which are sold can be absorbed into bitcoin if all miners sell their daily production. As you point out, the TAM is insane for bitcoin.
As for your chart, I remember seeing this before, but I also remember Preston Psyh talking very recently about how Elon mention to him in a recent podcast that the Tesla bitcoin holdings were sold and only SpaceX still had theirs. So I think these charts needs to be updated.
And they rarely burst.
Just deflate (sometimes rapidly) and reinflate based on both their value and also how the herd sees their value.
I'm sure there was a car bubble which the horse and cart crowd scoffed at.At the reinflation however,there was mass adoption.
And there will be more and more bitcoin investors. You correctly pointed out that bitcoin has no upper price. But what asset does? It's just that other assets don't change so rapidly. For example, real estate. 30 years ago, a house cost a certain amount of money. Today, a similar house costs 2-3 times more.
It's the same with bitcoin, I think.
Real money is backed by the government. Cryptos are the glass beads in your story.
It's interesting that you only had one thing to say. It means you agree with most of what I wrote. You will see this last part crumble right before your eyes. Every government is actively destroying their currency and thereby forcing each citizen to look for other options. It's the people who ultimately get to choose.