Why you can’t cash out part 1: Bitcoin’s “price” is largely fictional

Yes, this. Of all the times I watched the price of bitcoin for the past 5 months closely, more closely than I watched my cursor in VSCode suck my laptop battery away. At first I noted a trend, where at 6 AM PST I would be able to make a buy and get out by 10 AM. I kept telling myself that its the new yorkers that got OUT because they were worried about the Pacific coasters waking up. Then the time shifted the next day, and I lost my "daily" shirt (the max I would promise to lose that day).

Over time I noticed these periods of a week or so where the price would then become a bear market. And it was so easy to blame it on Dimon or some other Wal street junkie that said Bitcoin was doomed.

Then these stopped lining up. Then some ICOs got pumped. Ether tanked while Bitcoin blew up. I started to think how unglued it all became from anything that Coindesk was saying. Coindesk always ended their prediction with "But if it ends up less than X then Y will happen" Basically making it so that hey, there's a chance this will happen instead and this is the secret clue. But nothing was lining up, it started to feel like the perfect storm where you know extremely experienced investors could lure the masses into pushing tones of coin after a large drop. Even with 1000 people rushing in after a 15% drop in the price that day, the week before the 15% drop meant the price was going to rocket. Not this week, this time, the price is going to drop another 10% the next day.

Finally 3 days later, an amount of time that didn't coincide with ANY news and the price finally rose. By now most of those 1000 people had already cut their loses, but it was too late, whoever was jacking the price around already took their gains. And who cares about those 1000 people - the price is rocketing again.

So I left when BTC was around 4.5k. I should have listened that you have to be in the long game. But even so, I absolutely agree with this article - the price is being controlled by some group - some secret group of well placed investors that have a set of companies that run bots across all exchanges. They will continue to do this forever because unlike a stock, a government can never control a crypto currency. It would require all governments to coordinate and make the same set of rules. It can all be subverted if one exchange can live outside of those rules.

All of the bitcoin craze comes down to this:

Do you know what's behind a fiat currency? A country

What is behind bitcoin? Thin air.

Yes, it is working really good for some people, but the logic behind it is flawed.

We don't need to make this general comment on every specific Bitcoin thread. A pyramid scheme requires a central actor to run the scheme, Bitcoin has none. This article is specifically about the author's opinion of what "price" and "market cap" mean in the context of Bitcoin.

You'd probably find that 40% of US equities are owned by fewer than 1000 asset managers as well, so I'm not sure that this is all that relevant. If Vanguard decided to liquidate their holdings overnight there would be pandemonium just as if these people decided to liquidate their BTC, but it's not going to happen in either case.

> I don't think the answer is nothing.

Seriously? Think about it. If you could pay, say, $100k to own all the bitcoin in the world, would that be smart or would that be stupid?

Why would anybody buy bitcoin from you if you owned all of it? Everyone will prefer to use a cryptocurrency that either: a) they already own some of; or b) a merchant is requesting; or c) they expect to go up in value more than an alternative. Now, in calculating c), everyone knows that everyone else is looking at a) and b) as well. The expectation of Bitcoin if you're the only holder is really bad.

If you like your chances at 100k, take the experiment out further. How about 1 million? 10 million? The ceiling here is super low relative to the "market cap" people are talking about.

So it's not just the buy/sell dynamics. Bitcoin doesn't have intrinsic value, and that's actually weird --- most other securities do. The most similar security is gold, which is like, 1% intrinsic value and 99% this type of speculative logic. The difference is that gold is unique --- bitcoin isn't.