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Comment by lancesells | Hacker News Reader

The funny thing is two years ago BTC was under 10k. The sky is not falling it's probably just going back to a more sane price.

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12 years ago it was a penny. 12 years is not long when we are talking money, so…

Agreed. I don't see any value in it.

> sky is not falling it's probably just going back to a more sane price

Prices per se are almost never meaningful.

Most crypto purchases are underwater [1]. (This is almost always true when something traded grows in value and buyers before crashing.) Many participants are leveraged. Financially, or operationally due to the cost of their mining rigs and long-term energy contracts.

There are also vagaries specific to PoW. For example, a steep enough decline between difficulty adjustments could make mining fundamentally unprofitable, which has its own suite of knock-on effects.

[1] https://www.bloomberg.com/news/articles/2022-06-14/bitcoin-r...

The question is: What is a sane price for bitcoin? I would say $0.00.

You can bet on that happening over long periods. Shorting the 2024 bitcoin price isn't hard at all for a consumer.

You can only short bitcoin on exchanges that are internally betting on increasing crypto prices. Not exactly a fair market maker.

Also an unlikely party to pay out should you win.

https://www.cmegroup.com/markets/cryptocurrencies/bitcoin/bi...

CME? The same place I can bet up or down on soybeans next year?

The fair price is where the curves of supply and demand meet.

That's what is "fair".

Otherwise we need to speak about "intrinsic value". And there's really no intrinsic value in Bitcoin, money doesn't have an "intrinsic value" against something else.

And if you want to argue that "but the technology!", then what can we talk about? Bitcoin's code is open source, if we launch our own coin does it have intrinsic value as well? Can we create endless new blockchains and create value out of thin air?

This is why I don't believe Bitcoin has a "fair" price, to have it, it would need to have a value and then the loop begins again.

Bingo. A lot of people mistakenly conclude that Bitcoin's "fair value" must be 0 because it lacks an intrinsic value. But they fail to realize that fiat money also lacks an intrinsic value. Even gold to a large extent lacks an intrinsic value in the sense that its intrinsic value is a negligible fraction of its actual market value.

You're close. Fiat money has value when it's backed by something. The US$ is backed by the US government. It's still fiat money.

It is "backed" as in endorsed, or supported, by the US government. In the same sense that Bitcoin is "backed" by its many worldwide supporters and miners. It is not "backed" in the traditional meaning of being redeemable for something else at a fixed rate ("backed by gold", "backed by silver", etc.).

Intrinsic value (or fair value) is a meaningless concept when applied to currencies. The US dollar has value because the US government maintains a fairly effective monopoly on violence over a large chunk of real estate. They require residents to pay taxes in that currency, and if you don't pay then the government will seize your assets by force. Overall this system works pretty well.

The intrinsic value of fiat money is that I can pay my taxes with it and avoid persecution by the state.

Clearly greater than zero, if only for the novelty value. What are Zimbabwean $100trn bills going for on eBay these days?

I would take all bitcoin available at that price and so would others.. not really a sane price

A fair value for Bitcoin at the moment is ~$42,000.

https://www.coinfairvalue.com/coins/bitcoin/

> What do you mean by "fair value"?

https://steemit.com/bitcoin/@pablomp/cryptocurrencies-what-i...

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