all of what you said is applicable to gold as well for example. and with some differences (that probably make it worse) to most currencies as well. I mean you can even go further and expand that same argument to bonds and stocks. Yes the money has to come from somewhere and it’s either from another “fool” that bought your stuff directly (BTC) or indirectly (bought an iPhone and you own apple stock), or it’s because of money printer.
I also don’t understand your fixation with fees. Fees isn’t money/bitcoin that evaporates. It’s a price billed for a service. You either have fees to buy bitcoin (which goes to exchanges) or fees to move bitcoin (which go to miners).
Well, should have stayed diversified instead of putting everything on ETH lol. It‘s not a huge amount, but I left a couple of k on the table. Luckily it‘s not bothering me as I have other worries at the moment.
Potentially altcoins will catch up soon.
When ETH pops its probably a good time to get out and shift to BTC.
I would not hold anything else than btc to be honest. I think bitcoin is a very special and fantastic thing. But the “crypto” market is basically a giant rip off
I agree with @Joe_Coconut. if ETH pops, transfer some to BTC, or if you have additional savings and want more exposure, just buy BTC when you think it’s a good time to re-balance your port.
Does this chart really mean what I think it means?
My interpretation
Every now and then, the actual invested capital in BTC becomes equal to the actual market cap of BTC. Intuitively it makes sense because there is no returns generation and only cost generation (maybe not high costs) and hence the personal equity is the net asset value.
Does it mean the long term market cap should be expected to be at same value as the long term invested capital ?
It’s different because in this case, there’s an inflow of money that’s not from pure investing, that’s not poured into the system in exchange of a hope for future returns. A customer is not a greater fool expecting to resell the product they just bought for a higher price. To be clear, by greater fool I’m referring to Greater fool theory - Wikipedia, it’s not simply someone paying for something.
If I create a company using my own 10kCHF, and I manage to grow this company, get clients who buy my product, the company is more valuable because of this cashflow. Even assuming I only sell the company for parts and only get back my initial 10kCHF, along the way I’d have gotten a salary out of the sold products, so the company itself would have created value. I would have captured some of the value, while the customer would have captured the other part by getting a product they thought was worth the money without expecting to flip it for more money later.
Now if instead I create a company with 10kCHF but this company does nothing, and I just keep paying some fees to keep it running, my investment decreases in value. Once I close it, I’ll get back less than my initial 10k, while having paid fees that didn’t generate any cashflow.
The fees are the reason why BTC is not zero-sum for the pool of BTC investors, it’s negative-sum, meaning that if you sum all the money that investors got out and in of BTC, you end up with less than 0. Of course that doesn’t mean that some investors won’t still end up with profits.
Edit: I just reread the “Top replies” and realized that the greater fool theory and most of this reasoning has already been mentioned and explained several times already, so unfortunately I don’t think I’m adding much, sorry for the noise! Some posters have explained all that better than me, so I’d suggest to reread their posts.
I think it’d be helpful if you added a link to your source. I’m wondering which definition they use for “realized”, as I doubt for instance that they have stats about when investors realize (i.e. through selling their BTC) their gains and losses.
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It will come in it’s due time…
