In 2008, the Dow dropped from 11,000 to 7,000 over the course of several months. What did we call it? A crash. When bitcoin drops from 20k to 10k (now trading around 14k) over the course of one day, optimists call it a "natural market correction"
Yes, I was being a little cheeky. Still, 50% crash in a commodity with market cap of hundreds of billions is not a small detail.
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DJIA combined market cap is a few trillion (5ish atm). Bitcoin market cap atm is 250 billion, and was 50 billion higher yesterday. I don't think treating bitcoin as a small easily manipulated commodity is quite right.
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1/ To
@csuwildcat 's point, the distribution of BTC is in fact very unequal. 4.11% of wallet addresses own 96.53% of ~ 21 million BTC. That means that this owners can sell off when they think it's hit high enough, massively swinging the market value:https://howmuch.net/articles/bitcoin-wealth-distribution … -
I mean all this is true. It should also give you some doubts about the claim that BTC is important because it can replace "fiat currency"
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Yes, BTC is no longer in the currency game. It hasn't been since the markets took over years ago, markets mainly gained because of prohibitive mining costs, which casts the whole idea of a fixed qty currency and more impotant, it's strategy, in doubt for me.
End of conversation
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But most of that market cap isn't real money people have put in. Don't have numbers, but a huge number of them will have been bought at a lower rate then hugely inflated in a matter of months. Stable commodities actually have had a value somewhere near their market cap pumped in.
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And the Dow largely reflects dollar amount invested in liquid stable commodities?
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Well yeah, to be fair they're all inflated. But stable indexes will have had a lot of people buying at roughly the current rate for a long period of time. Millions of bitcoins will have been bought at MUCH lower rates and held.
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So you're saying the crash is no big deal because it was a bubble anyway?
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Are you talking about BTC or 2008? Depends what you mean by "a big deal" — both are obviously notable. 2008 was a horrible event in which a lot of people suffered through no fault of their own. Haven't yet heard of any huge negative impact of the BTC "crash".
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And for disclosure, I have BTC I bought in Sept, which are still worth 3x what I paid for them. I have no plans to sell any time soon.
End of conversation
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It's not unusual - gold has a market cap that is 35x that of Bitcoin, but it routinely swings far more than aggregated indexes. It's almost purely a volume/participant/technicals difference.
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