Parman - Activate OP_GFY now!! on Nostr: BITCOIN IN ADDRESSES IS SCARCE, "BITCOIN" ON EXCHANGES IS INFINITE. I want to talk ...
BITCOIN IN ADDRESSES IS SCARCE, "BITCOIN" ON EXCHANGES IS INFINITE.
I want to talk about the effects of #Bitcoin price suppression logically, but use extreme numbers to illustrate some obvious points...
Suppose price was suppressed to $1 today using whatever methods available. What would happen is that all available bitcoin would very quickly be bought, then people would want more, and some who bought might sell for $2, and so on, and up we go.
But why can't price be suppressed back to $1 forever?
First consider the methods...
They all involve either selling bitcoin that doesn't exist to people who think they getting bitcoin (ETFs or long contracts in various forms, that pay bitcoin or cash in the future at settlement - some never settle),
or
getting people with bitcoin to buy contacts in exchange for their bitcoin (the contracts being cash arbitrage profitable for the bitcoin holder). These people anticipate buying bitcoin back later with immediate dollar profits.
Ultimately bitcoin always flows to people who want it more - so even though some people might sell some bitcoin in exchange for a contract, over time the bitcoin they relinquish goes to people who are less inclined to.
Also, the people that are buying real bitcoin eventually get all the available bitcoin, and the people who are buying paper bitcoin lose all their dollars in exchange for infinite quantities of bitcoin (they're getting scammed).
What happens when the people buying real bitcoin buy up all the $1 bitcoin and there is none left?
Either
1)
The exchanges acting badly abolish withdrawals (remember Celucius "HODL" mode? Or was that BlockFi?), with the honest ones having zero trading volume, and users with locked funds can continue to buy and sell fake bitcoin at the artificial price, but never self custody. They might even be able to trade p2p with this easy money (easy = not scarce and "easy" to produce, ie fiat), or they'd make fake unbacked derivatives (wrapped versions with no evidence of backing or ability to redeem). This will birth an ALTERNATIVE MARKET with real bitcoin which can only be exchanged by p2p trade directly with bitcoiners who actually have bitcoin, or via decentralised exchanges. The price of bitcoin will then find its true form, decoupled from paper bitcoin.
Or
They go bankrupt
Or
The price goes back up to a level where bitcoiners release some bitcoin back to the market, sufficient to allow fractional reserve to continue a LITTLE longer but at a higher price - THIS is what I think is happening, which is why bitcoin isn't $1 and also not $1M.
The way the manipulation ends is by waiting. Bitcoin always flows to people who want to hold it harder.
The price gets to $1M when most of the people who wouldn't sell at $1M (me include) own most of the bitcoin. Then up from there.
I don't know how long it takes, but the lower the price, the faster the 1M+ holders get all the bitcoin. That is the logic I can't find a flaw in
I want to talk about the effects of #Bitcoin price suppression logically, but use extreme numbers to illustrate some obvious points...
Suppose price was suppressed to $1 today using whatever methods available. What would happen is that all available bitcoin would very quickly be bought, then people would want more, and some who bought might sell for $2, and so on, and up we go.
But why can't price be suppressed back to $1 forever?
First consider the methods...
They all involve either selling bitcoin that doesn't exist to people who think they getting bitcoin (ETFs or long contracts in various forms, that pay bitcoin or cash in the future at settlement - some never settle),
or
getting people with bitcoin to buy contacts in exchange for their bitcoin (the contracts being cash arbitrage profitable for the bitcoin holder). These people anticipate buying bitcoin back later with immediate dollar profits.
Ultimately bitcoin always flows to people who want it more - so even though some people might sell some bitcoin in exchange for a contract, over time the bitcoin they relinquish goes to people who are less inclined to.
Also, the people that are buying real bitcoin eventually get all the available bitcoin, and the people who are buying paper bitcoin lose all their dollars in exchange for infinite quantities of bitcoin (they're getting scammed).
What happens when the people buying real bitcoin buy up all the $1 bitcoin and there is none left?
Either
1)
The exchanges acting badly abolish withdrawals (remember Celucius "HODL" mode? Or was that BlockFi?), with the honest ones having zero trading volume, and users with locked funds can continue to buy and sell fake bitcoin at the artificial price, but never self custody. They might even be able to trade p2p with this easy money (easy = not scarce and "easy" to produce, ie fiat), or they'd make fake unbacked derivatives (wrapped versions with no evidence of backing or ability to redeem). This will birth an ALTERNATIVE MARKET with real bitcoin which can only be exchanged by p2p trade directly with bitcoiners who actually have bitcoin, or via decentralised exchanges. The price of bitcoin will then find its true form, decoupled from paper bitcoin.
Or
They go bankrupt
Or
The price goes back up to a level where bitcoiners release some bitcoin back to the market, sufficient to allow fractional reserve to continue a LITTLE longer but at a higher price - THIS is what I think is happening, which is why bitcoin isn't $1 and also not $1M.
The way the manipulation ends is by waiting. Bitcoin always flows to people who want to hold it harder.
The price gets to $1M when most of the people who wouldn't sell at $1M (me include) own most of the bitcoin. Then up from there.
I don't know how long it takes, but the lower the price, the faster the 1M+ holders get all the bitcoin. That is the logic I can't find a flaw in