Day Trader’s Aftermarket Lounge 18 Nov 2020

Originally posted by verce: ↑

Keep in mind that the market cap for Bitcoin is about 330 billion USD right now (there is something like 9 trillion worth of gold in the world). For a global currency/global asset, that is quite a small market cap and naturally means it will be subject to increased volatility.

By way of example, the total value of US 100 dollar bills and the total value of Euro 100 dollar notes is about 2.5 trillion. You have to consider the size of the potential economy that Bitcoin might serve in the future - which is undoubtedly global in scope.

Even if you don't think it's pertinent to your area of focus today, it IS emerging as a new asset class, and its current market penetration is so small in footprint that prices are inevitably going to go MUCH higher. When Wall Street dedicates resources to this space (when not if) it's going to flourish and become a very important aspect of modern portfolio theory.

People think gold is the only store of value out there. But people also use fancy artwork, real estate, cars and collectibles to store value - that's a ~280 trillion USD market for the primary purpose of parking money.

If Bitcoin ends up being just 1% of the global store of value market, that's potentially 150,000 USD per coin.

From a mile away I can see the value transfer towards Bitcoin happening as digital millennials grow up and inherit wealth. Will they buy more gold like the boomers, or will they prefer something that is more digital and speaks to their generation personally? If you fail to notice this generational shift occurring right before our eyes, well, that's on you.

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Very interesting argument and one I have pondered over for a few years now.

I believe Bitcoin has now become another asset class in trading and I personally believe it is highly unlikely that in the near future they will find a use for it. Certainly wont replace currency.

Now we may live in a future that cars fly and they might find a use for Crypto in general due to the math that has gone into it but I dont see that happening any time soon.

I say this for a number of reasons.

Firstly and foremost while it will make some people very rich, it is next to impossible to replace normal currency with Crypto due to various complexities of the existing global banking and finance system an underlying production and GDP.

In 2001 the Greeks cooked their books and fudged their numbers and adopted Euro currency. Their yogurt based economy changed literally overnight without any attention paid to what it will do both to their economy as well as the rest of the world.

It wasnt until the GFC hit that the real problem became very evident and austerity came in and they realized both sides would have been far better off not doing what they did.

The way I see it, Crypto will be by 10k folds more complex, it simply wont happen and if it does it will lead into a monumental economic breakdown. We have had gold ever since human existed and today most of the gold owned by people mainly exists on digital space, if we were ever going to replace money with something IMO it will be gold.

Besides, Bitcoin just happens to be one of the first ones with good PR, otherwise there are countless Cryptos some with better features as well so its a matter of taking your pick.

Bitcoin has fallen significantly previously, so I would be very hesitant to invest. Just my opinion.