Do you think that the central banks are secretly propping up tulips?
I mean bitcoins?
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Cierzo · M
The only reason I can think of to do that is to make it crash, as a way to say 'see, there is no safety outside fiat money'.
Invisible · 26-30, M
And when I say the government, I mean the fed
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Invisible · 26-30, M
@Feuerwehrmann I know plenty about bitcoin and other cryptos. My take on them, generally, is that they have no intrinsic value and are doomed to collapse in price once the speculators exit the market.
My reasoning for this is that the only thing that determines the price of a coin is supply and demand. Every other benefit that comes from these cryptocurrencies is not a benefit that comes from owning any particular amount of them, but rather from using them. It does not matter the price, they can be near worthless and still serve the purposes they do now just as well.
Because of this, coupled with the fact that they are so liquid, when big speculators like banks and hedge funds and other big holders begin exiting cryptocurrencies, there will inevitably be a surge in supply and a downtrend in price. For other speculators, this downtrend means one thing: sell. For the people that do actually use cryptos to buy things, this means something similar: use cryptos like you normally do, but to protect its value, keep your money in another medium while you aren't actively spending it. What this means for most people is that they will only have dollars and they will buy bitcoins via an exchange only just before they intend to spend it.
The demand will be decimated and cryptos will still serve the same functions that they did before.
My reasoning for this is that the only thing that determines the price of a coin is supply and demand. Every other benefit that comes from these cryptocurrencies is not a benefit that comes from owning any particular amount of them, but rather from using them. It does not matter the price, they can be near worthless and still serve the purposes they do now just as well.
Because of this, coupled with the fact that they are so liquid, when big speculators like banks and hedge funds and other big holders begin exiting cryptocurrencies, there will inevitably be a surge in supply and a downtrend in price. For other speculators, this downtrend means one thing: sell. For the people that do actually use cryptos to buy things, this means something similar: use cryptos like you normally do, but to protect its value, keep your money in another medium while you aren't actively spending it. What this means for most people is that they will only have dollars and they will buy bitcoins via an exchange only just before they intend to spend it.
The demand will be decimated and cryptos will still serve the same functions that they did before.
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Invisible · 26-30, M
@Feuerwehrmann So you think more and more speculators will keep dumping money into cryptos forever? That's the definition of a Ponzi scheme, which is exactly what this is.
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Invisible · 26-30, M
@Feuerwehrmann I read what you said.
[quote]All this seems logical when you assume that large investors will exit the market for bitcoins and other cryptocurrencies. I don't think that will happen.[/quote]
So you don't think investors will exit the market.
Let's consider the two cases we get when we are given this assertion:
1. No investors are exiting and some investors are entering cryptos. (What I initially assumed you meant)
2. No investors are exiting and no investors are entering cryptos. (What your refuting of my assumption has lead me to deduce is your claim)
I don't know how you can possibly think that this is the case. If investors aren't entering or exiting cryptos, why have the prices have risen by well over 200% YTD? Collusion? I think you'll see the impossibility of this, so I'll refer to #1 going forward.
In this case, the way you describe it, the only time that prices would drop is when speculators temporarily exit their positions. They would then, "inevitably" return to cryptos with an equal to or larger position than the one they had earlier. Otherwise, it would be construed as an exit. If this was the case, then the prices would never really drop because there would be no risk. Buying the dip would [i]always[/i] make money. Investors would take advantage of this and make a hard bottom to the price curve. The fact that this doesn't seem to be happening tells you that investors themselves aren't sure if other investors are going to stay in cryptos.
If I'm still wrong in my interpretation, then please point out why rather than telling me to read it again, because at this point I think I've analyzed your words more than you have.
[sep]
P.S. Do you realize how ridiculous this sounds? You need to back the things you claim with reasoning.
[quote]the return to cryptos will seem inevitable because totally digitalized economies in the next 20 years or less is inevitable.[/quote]
[quote]All this seems logical when you assume that large investors will exit the market for bitcoins and other cryptocurrencies. I don't think that will happen.[/quote]
So you don't think investors will exit the market.
Let's consider the two cases we get when we are given this assertion:
1. No investors are exiting and some investors are entering cryptos. (What I initially assumed you meant)
2. No investors are exiting and no investors are entering cryptos. (What your refuting of my assumption has lead me to deduce is your claim)
I don't know how you can possibly think that this is the case. If investors aren't entering or exiting cryptos, why have the prices have risen by well over 200% YTD? Collusion? I think you'll see the impossibility of this, so I'll refer to #1 going forward.
In this case, the way you describe it, the only time that prices would drop is when speculators temporarily exit their positions. They would then, "inevitably" return to cryptos with an equal to or larger position than the one they had earlier. Otherwise, it would be construed as an exit. If this was the case, then the prices would never really drop because there would be no risk. Buying the dip would [i]always[/i] make money. Investors would take advantage of this and make a hard bottom to the price curve. The fact that this doesn't seem to be happening tells you that investors themselves aren't sure if other investors are going to stay in cryptos.
If I'm still wrong in my interpretation, then please point out why rather than telling me to read it again, because at this point I think I've analyzed your words more than you have.
[sep]
P.S. Do you realize how ridiculous this sounds? You need to back the things you claim with reasoning.
[quote]the return to cryptos will seem inevitable because totally digitalized economies in the next 20 years or less is inevitable.[/quote]