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Comment by eloff | Hacker News Reader

With stocks, you're purchasing future profits. That puts a floor under things. With crypto you're purchasing??? There's no floor. It has limited utility.

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Technically, with crypto there's always the less than legal or privacy oriented stuff. Unless you're expecting all that to suddenly disappear there's still utility to back its value there, even if not to maintain its value at the rather overinflated values cryptocurrencies like Bitcoin have (which are less practical for such purposes compared to say, Monero).

Plus, for the value to completely zero out you'd need lots of large organizations who have lots of money (be it ones who've borrowed it or ones who are 'holding' it for others) to not only run out of said money but also be unable to pull in new people with get-rich-quick schemes. Miners and stakers would also need to completely lose trust in cryptocurrency.

So, to zero it out, you would need a global economic crisis so large that it educates pretty much every 'sucker' out there, which is pretty unlikely to happen right now.

I've had stocks go all the way to zero.

And crypto go all the way to zero. I'm not sure what your point is. Companies can go bankrupt. So can coins. That's neither here nor there.

> I'm not sure what your point is.

See the bit about the "floor" in your post.

Profits are the floor, as I mentioned. Negative profits in the absence of growth means the floor is 0 and the company may go under. That a stock can go to zero does not mean there's no floor under the price, but it depends on the company as to what that is.

Crypto has not gone all the way to zero. It went from $3T mcap to ~$800 billion. Despite over a decade of people predicting Bitcoin would go to zero, it's still $20K+ per BTC. Yes, down from the $68K euphoric highs of 2021, but substantially higher than its average price for most of its history, and on par or better than many stocks have performed this year.

Ordinary crypto currencies like BTC & ETH can't go bankrupt. They never had any liabilities to begin with. The majors such as BTC & ETH have deep, global, 24/7 liquidity. If you can find a way to make all the liquidity pools dry up for crypto around the world, I suppose it will go to zero. Good luck with that.

The entire stock market has also not gone to zero. You're comparing apples to oranges. Individual coins have gone to zero, as have individual stocks. It's irrelevant to the argument I made.

"With stocks, you're purchasing future profits. That puts a floor under things."

There is no floor for stocks.

You don't get finance.

Future profits of a public company can't go to zero? Bankruptcy is a thing, after all.

How much are Pan Am, Enron, Lehman Brothers worth today?

The floor denominated in dollars can still go to zero.

The utility of Bitcoin is its global payment network.

The floor of dollars is the might of the US military. If you haven’t noticed it’s prettttty strong these days.

The military has the power to stop hyperinflation?

Yes. It’s cringe but a war in the right circumstances could stop price growth in the US

I keep hearing this repeated, but the link between military and the strength of the dollar is tenuous at best.

Oil priced in dollars. Countries forced to buy/hold dollars. Country tries to use another currency to buy their oil, they end up like Saddam or Gaddafi c/o the US military.

Brazil, India, China might be too much for US military. Or at least two of those.

But, the floor of profits for a company is not denominated in dollars. It is shit you put in your mouth and eat or a useful product like a refrigerator which you can put things which allow you to not die.

Bitcoin, on the other hand, is some electricity, and arguably a waste of it.

>It is shit you put in your mouth and eat

/happy gilmore

> The utility of Bitcoin is its global payment network.

So zero then?

No, if dollars suffer hyperinflation, companies are still worth the present value of future cash flows. They'll suffer like everyone else in a tough environment, but they won't go to zero unless the company goes bankrupt. Bitcoin, on the other hand, has next to no utility and no profits. It can go to zero.

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