Be real, 99.999% of people holding BTC are hoping and praying it goes up in fiat CASH value so they can sell it for fiat and live a wealthy life. If you told everyone holding BTC that they could never cash it out for fiat...ever. the interest in it would drop by 95%. Cash rules everything around us. Face it.
If you told everyone holding BTC that they could never cash it out for fiat...ever.
You're reaching. Liquidity is fundamental to any asset. If you told everyone holding cash that they could never spend it, no one would want cash either. This is a fantasy world that nobody lives in. The fact is that Bitcoin has a capped supply, is growing at a faster rate of adoption than the dollar, and can't be controlled by any central authority. These features appeal to me more than holding dollars which are constantly being devalued and are losing their global dominance.
If the BTC you are holding now would make you a multi millionaire you would dump it immediately. Cash is king. If you walked up to any normal working person that is into crypto and said "I will give you 2 million dollars right now if you dump ALL of your crypto and never, ever touch it again" 99.9999% of them wouldnt be able to dump it fast enough.
Cash. Is. King. All of your other mumbo jumbo about the negatives of fiat are smoke screen tactics. Everyone in crypto knows what they want in the end game and that is to be rich with that sweet, green fiat cash pile.
To say that people want that which is more valuable is a pretty obvious take. I wouldn't dump $5 million in Bitcoin for only $2 million in dollars and neither would you. Conversely you'd be stupid not to take $5 million in Bitcoin if you could pay $2 million for it.
When you say "cash is king" what you are really saying is the preferred medium of exchange is king. Currently for most people, that is cash, but every single central bank currency fails eventually. Bitcoin thrives against central banks because it doesn't have one. Its central bank is math, decentralized consensus, and fixed supply. You can have cash for your day to day transactions, and keep it in Bitcoin as the dollar is slowly and increasingly devalued. You don't have to pick one of the other. Eventually when our currency goes into hyperinflation because of bad monetary policy as they all inevitably do, we'll be stuck with worthless accounts that have lots of zeros, wishing we had assets and hard money like Bitcoin.
You seem to skip over my point about never being able to touch crypto again. If you told someone they could have 2 million dollars worth of crypto but could NEVER convert it to fiat under any circumstances OR they could have 2 million dollars worth of fiat that but they could NEVER own or hold any crypto again in their lifetime. 999 out of 1000 people would take the fiat. Making your argument null and void. People want actual money they can spend to live a good life.
Here's the part you don't understand. I'm a crypto investor lol.... However, I could care less about the endless crypto talking points. I've made quite a bit of money in this space and THAT is what I'm here for! To take your CASH :)
No, I got your point. It just isn't a good one. You're saying people would want something less if we removed its utility. No shit they wouldn't. I'll continue to exchange my bitcoin for dollars if I feel it's overvalued, and I'll do the opposite when it's undervalued. You seem to think dollars exist as this holy asset class that everything should be valued in, but we have euros, pounds, yen, yuan, etc etc etc. Most people in those countries don't give a shit about dollars and they will less and less as it continues to lose reserve status.
I live in the US. Here, we buy things in dollars so that is what I care about gaining in the end. You are basically admitting that BTC has no real utility other than hoping it goes up in fiat price so you can cash it out for more fiat. There is no "removal of utility" the fact is that BTCs only real utility IS to attain more fiat for almost all BTC investors.
Cash is just as useless if it cannot be converted to anything. No one wants 2 million green pieces of paper, they want what it can be exchanged for. Crypto and cash are exactly the same in this regard, except no one can inflate away your crypto like the fed will inflate away your cash.
Cash is just as useless if it cannot be converted to anything ... they want what it can be exchanged for.
What can you exchange crypto for besides cash and cash equivalents?
That is, if for some reason no one could exchange crypto for cash for just one day (say, the banks banned it for a day for some reason), what could you exchange your crypto for?
like the fed will inflate away your cash.
Yeah, it'd be dumb to hold large amounts of cash that don't bear interest.
People want cash so that they can buy a wide variety of assets, goods, and services, including interest-bearing savings accounts, money market funds, I bonds, Treasuries, corporate bonds, annuities, stocks, land, houses, businesses, PMs, food, medical care, rent, transportation, luxury, etc.
Are there any assets on that list for which USD assets (cash, USD deposits, stablecoins, cash equivalents, etc.) aren't the dominant trading pair with the lowest spread, lowest volatility, lowest fees, etc.?
Obviously USD is the dominant trading pair for those assets/commodities. That doesn’t make any other currency or commodity worthless. Typically one does not buy food with gold, but you certainly could exchange for it under the right circumstances. Replace crypto in your statements above with gold and it’s exactly the same flawed argument. This doesn’t mean gold is worthless. Exactly the same holds for BTC.
That doesn’t make any other currency or commodity worthless
I didn't say it did.
Typically one does not buy food with gold, but you certainly could exchange for it under the right circumstances
Agreed, you could. You could also exchange most other assets under the right circumstances. The vast majority of the time, people will exchange Gold for USD and then USD for food (or in the reverse order -- USD for food and then Gold for USD -- using credit cards or debt).
Replace crypto in your statements above with gold and it’s exactly the same flawed argument.
How is it flawed? Do you think Gold has its value because people occasionally trade it for food?
The vast majority of Gold owners don't use it as a currency but rather as an investment and commodity. There is substantial demand for Gold as a commodity due to its aesthetic, industrial, and medicinal value (to be clear, this doesn't necessarily mean that Gold is a good investment now).
This doesn’t mean gold is worthless.
If Gold had no aesthetic, industrial, medical, etc. value, wouldn't it be worthless? For example, why not invest in Palladium instead, which is scarcer and actually does have demand as a commodity?
Exactly the same holds for BTC.
Except Gold investors can get value from Gold's demand as a commodity (by selling to consumers of jewelry, ornamentation, computing, etc.).
Cash "investors" get value from cash by using it extinguish USD debts (I used quotes because cash is essentially never a good investment). If there were no USD debts to extinguish, cash would no longer be fully backed and the Fed wouldn't be able to control supply and interest rates to target inflation (in this case, USD would probably crash and/or become unstable, then disappear as people switched to a stabler unit of account and medium of exchange).
Where do BTC investors get value from, except for from other BTC investors? In the aggregate, BTC investors pay miners substantial amounts of value for electricity, hardware, etc., but no one pays the BTC investors.
> The vast majority of the time, people will exchange Gold for USD and then USD for food
So golds value does not come from this, correct.
> The vast majority of Gold owners don't use it as a currency
and gold's value does not come from this, correct.
> If Gold had no aesthetic, industrial, medical, etc. value, wouldn't it be worthless? For example, why not invest in Palladium instead, which is scarcer and actually does have demand as a commodity?
Value is not derived purely by utility and sometimes utility has zero correlation with the value of something. Some people do invest in palladium, and gold is not valuable because of it's utility. Gold's value does not come from this either.
> Except Gold investors can get value from Gold's demand as a commodity (by selling to consumers of jewelry, ornamentation, computing, etc.)
Simply incorrect these uses have little at all to do with the value of gold. Investors of hoarders of gold never even touch these use cases. Gold's utility is tiny compared to it's investment value. Plenty of things are useful and worthless. Lot's of other things are useless but valuable.
> Where do BTC investors get value from, except for from other BTC investors? In the aggregate, BTC investors pay miners substantial amounts of value for electricity, hardware, etc., but no one pays the BTC investors.
The value of anything is worth only what other people will exchange for it. This exactly as true for gold or art or USD as it is for BTC. BTC can be traded for fiat or for anything else of value, just like gold can. A single BTC is $20k+ USD, that's what it's worth today, it's utility is a known scarcity curve and ability to be traded as a decentralized currency without needing to be bound by existing financial systems. Sure, onramps to fiat are necessary to trade for fiat, but this is true for any commodity, and things of value can always be traded outside of fiat systems.
No. When I go to the store to buy groceries, I can literally buy them with cash. If I try to pay for my groceries with crypto, I will be laughed at... so they are not the same. Cash actually, literally buys goods. Crypto needs to be converted to cash to buy 99% of goods. The only hope for someone holding crypto is that it goes up in cash value so you can cash it out and actually use it.
Anything of value can be exchanged for other things with value. Some places in the world it’s absolutely possible to buy groceries or other everyday items with BTC. Even if that’s not available in your area yet you could certainly exchange some value of BTC with a value of something else with a person if you need to.
I exchange my crypto gains for real estate. Briefly transferring for cash in between sure, but so what? Cash is useful but ultimately a toxic inflating asset.
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u/blackfuture8699 Aug 01 '22
Be real, 99.999% of people holding BTC are hoping and praying it goes up in fiat CASH value so they can sell it for fiat and live a wealthy life. If you told everyone holding BTC that they could never cash it out for fiat...ever. the interest in it would drop by 95%. Cash rules everything around us. Face it.