That’s the previous commenter’s point, isn’t it? The crypto advocates claim that crypto has intrinsic value simply because of its scarcity (supply-side only). The commenter’s rebuttal is that if this were true, their kid’s doodles would be extremely valuable, yet they are not because only the parent treasures them (demand-side).
With gold, one can come up with a plausible story for the demand side of the argument that it has intrinsic value: gold’s combination of beauty and scarcity has made it a potent status symbol across many eras and cultures (not to mention its industrial uses).
With crypto, it’s much harder to imagine what the demand side of the story is. There’s a finite supply of Bitcoin, and people demand it because… well, it’s not because they can pay for anything with it. They mostly seem to demand it because they believe someone else will pay them more for it in the future. And what do we call it when an asset has nothing going for it besides that hope?
I’m still waiting for a compelling story about why demand for Bitcoin or any other cryptocurrency will persist beyond the current vogue, which is driven by the notion that “it’s gonna be huge in the future”. How long can people keep the faith, and what happens to demand if and when they stop?
With gold, one can come up with a plausible story for the demand side of the argument that it has intrinsic value: gold’s combination of beauty and scarcity has made it a potent status symbol across many eras and cultures (not to mention its industrial uses).
With crypto, it’s much harder to imagine what the demand side of the story is. There’s a finite supply of Bitcoin, and people demand it because… well, it’s not because they can pay for anything with it. They mostly seem to demand it because they believe someone else will pay them more for it in the future. And what do we call it when an asset has nothing going for it besides that hope?
I’m still waiting for a compelling story about why demand for Bitcoin or any other cryptocurrency will persist beyond the current vogue, which is driven by the notion that “it’s gonna be huge in the future”. How long can people keep the faith, and what happens to demand if and when they stop?