Re:BadEconomics: Putting $400M of Bitcoin on your company ba...
by SpicyLemonZest on Monday January 04, 2021 @11:32AM
(#25633579)
Institutional investors have to (and personal investors should) have some concrete understanding of what an asset is and why it's valuable before investing in it. If there's a better understanding than "just a currency", sure, that's worth discussing. But if it's an entirely new asset class and can't be simplified into any narrower definition, how do I figure out what a reasonable price is or what numbers I should put on my accounting statements?
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Re:BadEconomics: Putting $400M of Bitcoin on your company ba...
by mateuszf on Monday January 04, 2021 @11:50AM
(#25633924)
> But if it's an entirely new asset class and can't be simplified into any narrower definition, how do I figure out what a reasonable price is or what numbers I should put on my accounting statements?
Two words: digital gold
Re:BadEconomics: Putting $400M of Bitcoin on your company ba...
by washedup on Monday January 04, 2021 @11:56AM
(#25634018)
Markets determine which price is reasonable. It's a collective decision about how much something is worth. Is it reasonable to say bitcoin should be worth less than $10K, $1000, $100 etc...? No, because the price today is not that.
Re:BadEconomics: Putting $400M of Bitcoin on your company ba...
by SpicyLemonZest on Monday January 04, 2021 @12:18PM
(#25634502)
You're misunderstanding something here. It's reasonable and very common to say that the true value of a financial asset is different than its market price; anyone who makes an investment in something is expressing the thesis that the current market price is lower than it will be in the future.
Re:BadEconomics: Putting $400M of Bitcoin on your company ba...
by washedup on Monday January 04, 2021 @12:31PM
(#25634776)
No, I don't misunderstand, I agree with you. Just saying that a market price is the best guess for whatever the "true" price is / should be. Because cyrpto markets are easily accessible across the world to everyone, it will be closer to the "true" value than other markets that are less accessible.