The day that objective value -- or objective anything -- is "an abstraction" is the day the world has been fully inverted.
Objective Value - no, seriously.
- Thread starter chasinfla
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The day that objective value -- or objective anything -- is "an abstraction" is the day the world has been fully inverted.
I see. It seems that to consider one's self an "Elite Trader" is to disdain any objective definition of anything other than what is crowdsourced at the moment.
That might be a suitable approach for a "speculator" (aka: gambler) but it would seem a helpful PSA to note that no significant amount of capital is ever expended on any idea without at least attempting to objectively measure all facets that can be measured, and to approximate all the other facets by some appropriate means of quantifying the uncertainty involved.
Given this, it might be handy to identify what, if anything, about any asset's value is measurable on the left side of the equation (ie a + b =price; where a = any objectively measurable amount and b=a best guess about the rest). Perhaps nothing is, in which case the speculators are correct and it's all a spin of the wheel.
The question is raised because if price discovery (the alleged service that speculators provide to a market) is to be intelligent (a big "if", apparently), then some effort ought to be expended upon "a" above. By someone, at least.
Wait, let me shorten this: traders are all about risk mitigation, right? An informed opinion about value is a form of risk mitigation.
That might be a suitable approach for a "speculator" (aka: gambler) but it would seem a helpful PSA to note that no significant amount of capital is ever expended on any idea without at least attempting to objectively measure all facets that can be measured, and to approximate all the other facets by some appropriate means of quantifying the uncertainty involved.
Given this, it might be handy to identify what, if anything, about any asset's value is measurable on the left side of the equation (ie a + b =price; where a = any objectively measurable amount and b=a best guess about the rest). Perhaps nothing is, in which case the speculators are correct and it's all a spin of the wheel.
The question is raised because if price discovery (the alleged service that speculators provide to a market) is to be intelligent (a big "if", apparently), then some effort ought to be expended upon "a" above. By someone, at least.
Wait, let me shorten this: traders are all about risk mitigation, right? An informed opinion about value is a form of risk mitigation.
Please don't take my short liners too seriously. Your questions reminded me of my graduate school poli sci classes many decades ago and made me chuckle a bit.
What I did learn over the years is that by the time we are sufficently satisfied with our analysis to implement, the paradigm has shifted and we've missed the opportunity.
OP is at least 5 years late to the party...
First, there was really no statement made in the OP, it's main part was actually a question.
Second, true, there was a sentence containing the words ought to be, but that is saying what a thing should be not what a thing IS.
If you think cryptos' valuation is insane, wait until you learn about NFTs, DAOs, and the multiverse.
First, there was really no statement made in the OP, it's main part was actually a question.
Second, true, there was a sentence containing the words ought to be, but that is saying what a thing should be not what a thing IS.
If you think cryptos' valuation is insane, wait until you learn about NFTs, DAOs, and the multiverse.
That thing goes out the window when you realize that the old saying "price can stay irrational longer than your short position" is true.
You are wondering about cryptos' high valuation but this also happens to stocks. Just think of the late 90s tech bubble, or Tesla's stock anytime.
Several times it is not the fundamentals, but the EXPECTATION or FOMO that drives the stock.
I could challenge the notion of objective value by offering aspirational value as an alternative. Both TSLA and the cryptos are great examples of the latter while they'll drive you to heavy drinking searching for the first.
Value is by definition subjective. Objective value is really "market value", and only exists when one can observe market prices. You might of course think the current market value is wrong or will change going forward.
Estimating future market value for something like ETH is just guesswork.
Estimating future market value for something like ETH is just guesswork.
Users, Fees, TVL; and the variable rate of change of those metrics
Weights, measures and standards are values that are objective, the interpretation of those values; subjective.
ie. One kg = 1 kg
In a well working market (be it anything) competition finds the lowest price though. Thus there are price ranges and for sure smaller fluctuations, but nobody is going to pay 100 bucks for a cup of coffee. For NFTs/cryptos/multiverse property on the other hand...