Related question. If the % of such assets is treated as the "exit pressure" from the state-backed economy, how extreme is this regime? How often does the world hit 13.7% in non-fiat instruments?
Could you treat this as "discount all futures based on state power" by 86.3%?
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This is conveniently 1 in 7, so you could say if you were doing scenario planning, you should think in terms of 1 in 7 futures being based on collapse of state power perhaps...
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What got me thinking about this is rise of retail crypto in India. India is already the world's biggest retail gold sink since it has historically been a place where people basically saved in gold. I think retail crypto in India is basically a natural extension of gold jewelry.
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Weird when something looks like utopian exuberance from one angle (crypto valued in fiat is a boom, largest random wealth transfer in history) and utter ruin and collapse from the other side (fiat valued in crypto = dollar has collapsed to 1/600,000th of its value since 2009.
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This is not generally true of a boom, even one in a fundamental factor of production. If there's a real estate boom, it is not meaningful to say "dollars valued in terms of land is collapsing in value"
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Okay, that was an ill-posed question due to gold standard effect. So allowing for a decade of structural adjustment, how often since say 1981 has gold been more than 13.7% of world market cap? 🤔
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Replying to @vgr
It was like 100% as recently as 1971!
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I'm less comfortable with this more vague estimate of world dollar-denominated wealth, since PPP distortionary effects get more marked. But the principle is sound. twitter.com/max_arbitrage/
This Tweet is unavailable.
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Basically, I'm trying to get at the answer to the question: how seriously should the value of crypto be taken as a signal of impending civilizational collapse?
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It's a different class of people with... let's say more colorful imaginations... being cryptobugs as opposed to goldbugs or ammobugs or toiletpaperbugs. But the quant question finesses *why* you think the world is ending, and just values that class of bets.
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If cryptobugs don't have stories of collapse that are any more compelling than gold bugs, there's no reason to weight the significance of the 2.7T in crypto differently.
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Replying to
Null hypothesis. It's exactly zero sum, and crypto marketcap does not add any net apocalyptic scenario weightage at all. Only if crypto+gold do like a 2x relative to fiat will it be a signal of something.
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Replying to
Crypto contains multitudes. Basing it off of just gold, misunderestimates the gambling factor by atleast two orders of magnitude.
Goldbuggery is fantasy, BTCbuggery is scifi, cryptobuggery is vegas YA fanfic.


