Bitcoin has a market cap of $0 at all times regardless the price | Hacker News Reader

Bitcoin has a market cap of $0 at all times regardless the price

3 pointsmorpheos13710 comments

Journalists are perpetuating "fake news" by talking about Bitcoin's market cap. It is not an equity and it can not be used for real investment, production, or payment of taxes. It is not an equity or claim of ownership. It is also not a commodity, unless "hype" is considered the underlying tangible asset.

View on HN

https://www.cmegroup.com/trading/equity-index/us-index/bitco...

Worth noting that we have a futures contract to use in hedging BTC holdings (hodlings?).

If the June contract current price is any indicator we're still moving north. Of course a lot of factors work into this price and a good bit of that could be raw risk.

I expect this to be a stabilizing influence on the price of BTC to some extent.

The price of bitcoin could reach $1,000,000. That still does not mean it is a real economic asset. It can not be used to produce goods or services without converting (selling)to fiat at some point. It can not be used efficiently (competitively) with high transaction costs and deflationary supply. Money does not produce value. Price does not produce value. Hodling non productive assets does not produce value. See Adam Smith's "The Wealth of Nations."

Sir this is a Wendy's...

Whatcha gonna do if the money supply continues to increase?

Buying real assets is a good idea. Bitcoin is not a real asset until there is a Bitcoin economy, e.g. people buying and selling real goods in bitcoin, people making investments with bitcoin backed loans. It is exceedingly unlikely that a real bitcoin economy will ever develop because the factors that give bitcoin its high price (and high price volatility) oppose the factors that would give it utility as a currency.

> people making investments with bitcoin backed loans

There already are Bitcoin backed loans offered by both decentralized services (like Aave, Compound, Maker etc) and centralized services (like BlockFi, Celsius etc). They get real usage. Aave, Compound and Maker have $17B worth of crypto deposited in them as collateral. BlockFi has a $2.85B valuation.

>Bitcoin backed

>$17B worth of crypto.

Ah, so there are Bitcoin "backed" loans but they are denominated and paid in dollars. The supposed "value" of Bitcoin in dollar terms is what serves as collateral for these loans.

Here is a hint: price does not equal value, especially when it is as volatile as BTC price is. So essentially these are unbacked loans...

If BTC eats the dollar in the future, e.g. under USD hyper inflation, then BTC x USD creditors are still screwed like all other creditors lending dollars. Their debtors will be able to pay the loan back with depreciating dollars.

If you think Bitcoin has no value, why not short it? Bet on your beliefs. I think it has value, which is why I'm long.

Skin in the game > debate

Because the old adage of markets can stay irrational for longer than most people can remain solvent.

Betting on a short (even more against BTC) is a very different proposition than staying long on it, they have very different risk and losses profiles.

Reply on news.ycombinator.com