The rise of Bitcoin is a reflection of low trust in the existing currencies. Low trust leads to inefficiency.
Or... every reason?
Gold is a speculative asset that also has some limited tangible uses too. So does that mean gold has less reasons to decrease in price than an asset which only has tangible uses and no speculation?
BTC is a one way bet, right up to the point where people decide it isn't worth holding any more. Just like certain vintages of wine.
The fact that there is some small rate of losses doesn't significantly impact the amount of downside speculation you'd expect.
1. https://www.pewresearch.org/global/interactives/remittance-f...
If that were true, Western Union would obviously have less utility than Visa. But actually, WU and Visa solve totally different problems with different risks associated, so it doesn't make sense to compare them in that way.
And how do we judge whether the market price is "worth" the use cases or not? Isn't that exactly what the market is doing in pricing the asset?
The intrinsic value of Bitcoin is nowhere near the current price. When the speculators all sell and the only demand comes from people looking to actually use them, the price will drop by a lot.
But, when that happens, the speculators/grifters will simply move to another coin. That other coin will see a similar bubble, and bitcoin’s value will drop even further as people perceive it as “dead” or worthless (as maybe it should have always been perceived)
So until this shit gets under control somehow, cryptocurrency is going to remain the exclusive domain of the speculator/gambler/criminal/grifter/gullible. And of course, the world will suffer increased energy usage, pollution, and GPU shortages.
If gamblers and thieves dominate the crypto market and cannot be outcompeted by honest actors then by definition the market has decided it prefers gamblers and thieves to honest actors. If someone wants an economy with rules other than "lol Caveat Emptor" they shouldn't get into crypto.
What I think you are not considering here is that you can speculate both on the upside or the downside. Speculators are only trying to predict the future price, speculation is not the same as a "pump and dump scheme".
> When the speculators all sell and the only demand comes from people looking to actually use them, the price will drop by a lot. ... bitcoin’s value will drop even further as people perceive it as “dead” or worthless (as maybe it should have always been perceived)
Like you said yourself, if it is true that Bitcoin is overvalued then it would be a good thing for every Bitcoin user if its price dropped to the fair value. Why are you describing that situation like a bad thing here? I expect users would be happy that they can now afford more of the coin for practical use cases, and adoption in those use cases would probably go up more than anything.
Just accept that you're willing to shit on the planet to make a few bucks, it's fine.
Clearly the market doesn't think so. Nearly every asset class is getting inflated in the past year, in the middle of a pandemic no less.
Inflation encourages money changing hands. The market has absolutely fuck all to do with it.
Your bitcoin will have gone sideways three times, jumped up and down. Could be tripled. Could be halved. Still controlled by three chinese farms who could double spend at any point should it become less valuable.
Even as a hardcore socialist, it's worrying that cryptobots have failed econ 101.
Because you're hungry and your fridge is empty?
Inflation creates artificial demand and drives consumerism, thereby arguably causing more resource usage/wastage than would otherwise be the case.
Depreciating money means that people's time horizon narrows and they're thinking more and more of the present at the expense of the future, causing all kinds of negative externalities.
Capitalism is actually supposed to make things cheaper, by virtue of competition spurring everyone on to be more efficient and economic with their inputs in order to provide cheaper and better products.
> Were those currencies to deflate, it would literally be more beneficial to not touch them.
This is such a silly, hyperbolic argument. People need to eat, they have other desires than just hoarding money, there will always be reasons to give out money and therefore there will always be reasons to provide goods and services for that money.