Hacker News Reader

If you buy one coin for $10 crypto considers that the value of all of the millions of coins. https://en.wikipedia.org/wiki/Wash_trade

Yes, the $10 exists, but that $10 trade may have inflated the value ("market cap") of the coin by billions.

View on HN

Exactly. That's the fundamental reason that FTX is just the tip of the iceberg.

This is just a demonstration that this is a naive way of estimating value.

But this is exactly how all assets are priced and that price signal is good enough to take loans out against the asset collateral and create even more money supply.

Reply on news.ycombinator.com