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Old 13th July 2020, 04:10 PM   #667
Skeptical about skeptics
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Join Date: Sep 2010
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Originally Posted by lomiller View Post
When something has utility, market value will have an underlying attractor that can be used to estimate future market value. Eg For a stock you can estimate all the money the company will earn in the future and convent that into the equivalent value in present day money. For a commodity like copper, you can estimate future production and future demand.

You can’t do this with something like bitcoin where demand is almost entirely other speculators, and at some point speculators will either get bored or frustrated at having bigger players manipulating the price and move on to something where there are long term supply/demand trends driving up the value.
This is just made-up nonsense. Speculators drive the price of any brokered commodity to the extent that the price bears little relation to its "utility" value.

In any case bitcoin has utility. It can't be counterfeited and it can be transferred across the globe within minutes unhindered by man or machine. So bitcoin speculators aren't going to get "bored" and shoot themselves in the foot by dumping their holdings.
"The process by which banks create money is so simple that the mind is repelled. Where something so important is involved, a deeper mystery seems only decent." - Galbraith, 1975
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