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OK time to rant about prices and market cap. 1) What is up with this 'only 21m people can own 1 BTC' meme? You could equally say '10^15 people can each own 1 SAT'.

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SBF

@SBF_FTX

Aug 25, 2019

2) We could use BTC, 100 BTC, or 0.0001 BTC as units, and it doesn't change fundamentals. Stocks split all the time; everyone ends up with 2x as many shares each worth 1/2 as much. It has no real impact other than making it easier to type the price in a table with other stocks.

SBF

@SBF_FTX

Aug 25, 2019

3) It's true BTC isn't inflationary but USD inflation is only a few % and you get interest. So you can either hold BTC in a wallet or get paid a few % to buy USD govt bonds.

SBF

@SBF_FTX

Aug 25, 2019

4) It's market cap that matters, not price or supply on their own. The real question is what's worth more: a) All BTC b) 2% of all gold c) 10% of Canada's GDP d) Mastercard e) Jeff Bezos f) 20% of money US spent on food in 2019 All of those are valued at ~$150b (+-50%)

SBF

@SBF_FTX

5) FWIW using a-f to price BTC has been helpful for me. Makes it seem like $10k is a somewhat reasonable price, $100k if crypto really takes off in society, and $0 if it fizzles out. (Or anything in-between.) But current market cap is maybe in the right ballpark!

11:23 AM · Aug 25, 2019Twitter Web App

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I agree. people think bitcoin trends toward infinity. They set themselves up for financial ruin by "hodling" until 1 mil and putting all their savings in.

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and

Considering they’re all seemingly arbitrary comparisons, how have they helped you in valuing bitcoin? Just a general/personal comfort?

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Fundamental analysis of an emerging asset class is generally really hard and vague, but at least I have *some* intuition about the relative importance of BTC, Gold, and one year of Canada.

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and

What about the fact that the total derivatives market alone is worth 550 trillion? It makes it seem that cryptocurrency is something unlike any of those comparisons and cant really be compared, as the store of value/currency

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Comparing the notional of the derivs market to the capitalization/value of an asset class is kind of silly, really not the same idea

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and

Ya , I always compare market cap of cryptocurrency to companies in real world. $Bnb vs 0388.hk, $Bat vs Fb , to see whether it's overpriced.

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Good assessment Sam. One can be idealist over the long term, but should be realistic short term. BTC and crypto still have a a long way to go to have relevant products to the masses.