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Comment by shuntress | Hacker News Reader

Is this mostly caused by people coming to grips with the fact that "crypto" is entirely speculative with no actual value?

"TradFi" at least has a real floor because "real" money (as in: currency that can be exchanged for goods and services) and "real" investments (as in: shares of companies that provide goods/services) do actually exist. Even if significant portions of the market are driven by speculation.

Are we reaching the point where people trading crypto get bored and just... stop?

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The physicality of an underlying asset isn’t what makes people trade stocks, commodities, options or anything else. If you’re day trading soybean futures, it’s not the ideal of soybeans that wakes you up in the morning. It’s the money you could make. Bitcoin is a unique speculative asset because it’s value is based entirely on human interest, nothing else. I think crypto is here to stay as a speculative asset class. Where it’s long term price goes, I have no idea.

The physicality of the underlying asset does matter though. Soybeans in and of themselves have some fundamental value (food, feed) the same way oil does (fuel, plastics, etc).

There is no underlying value in having answers to a random cryptographic problem attested to you.

Soybeans (and most other assets) have inherent value which gives them a price minimum, but not necessarily a price maximum. Crypto has no price minimum (0 I guess, at which point returns are incalculable) and no price maximum because it has no inherent value.

My entire point is that crypto is a unique asset class, so I think it’s here to stay as long as there are people willing to speculate.

Soybeans exist and people consume them. Obviously you can speculate on whether the price of soy beans will go up or down but they will always (excluding, of course, obviously unreasonable scenarios) have some value because the soybeans themselves have some value.

The producers and consumers of soybeans are extremely likely to continue producing and consuming soybeans even if no one speculates on the value of soybeans. This is the "physicality" or "human interest" in soybeans.

Why would crypto be "here to stay" when there is zero use for it besides speculation?

All kinds of speculative assets exist solely to hedge and make money on. The algorithmic traders on Wall Street aren’t trading soybeans futures because they can eat them. They’re making money. If people see price fluctuations in anything, and I mean literally anything, there will be people trying to capture those alphas.

I should also point out I’m not bullish on crypto. I just acknowledge it’s unique asset class, and I don’t think it’ll just disappear.

I understand that speculative trading exists.

I'm saying people will continue to speculate on soybeans because they will always have some value.

With a purely speculative asset, the market will eventually run out of "bigger fools". At that point, any speculative trader will look at the asset and say "Why would I pay more for this than the 0 dollars it is worth?"

How long do you predict until Bitcoin hits a price of 0 dollars?

Once the last fool has bought in.

How long until then?

Any service can provide value, and Bitcoin does provide value: secure peer to peer transfer of money without a third party, nearly instantly. Why do you say there is zero use case? But like any service, its users decide what it's worth and sometimes that means network effects impact the value. I'm not making an argument for how much value this is or should have, but please stop saying the value is zero. It simply isn't true.

On paper, sure. But that just is not the case in reality and probably never will be.

Those "shares in companies" or stock makes you part owner. As part owner you may get a share of the profits in the form of dividends and voting rights.

When you buy stock in a company whether is in during an IPO or new issue of stock that money is used to hire employees or build a new factory and make even more profit. That can increase your dividend and make the stock go higher. The same thing can happen when you buy the stock on the open market but the connection isn't as direct. Companies with good stock performance are able to attract better employees which will increase their profits which benefits the stock holder.

None of this happens when you buy bitcoin or ethereum. Some crypto exchanges make up their own crypto currency and offer high interest rates on those but as we are seeing most of those are turning out to be scams.

As long as people have a way to potentially get rich with little to no 'real work', they won't stop.

Sure. Speculation certainly will continue and real money will continue to change hands.

But are we at least done pretending that crypto currency (at least, as it exists now) will ever have any practical purpose beyond being a fungible entity upon which gamblers speculate?

> But are we at least done pretending that crypto currency (at least, as it exists now) will ever have any practical purpose beyond being a fungible entity upon which gamblers speculate?

No, I don't think that's happened yet. I still know tons of people excited to build for "web3".

I don't think we need "rich" websites with javascript, "smart" phones in everyone's pocket, or "social media" at all.

But those all happened, and it seems to be a lot of the same vibe for "web3" builders right now.

It's difficult to get a clear picture of what exactly people think "web3" is. My general experience is that people who are caught up in web3 hype seem to actually just want simpler self-hosted/distributed resource redundancy.

To me it seems that way. With the bond market being so low, it seemed as though there was a lot of cash looking for some sort of outlet. All that was necessary was misleading hype and marketing.

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