Except that they still have a rock that the market currently values at $10. The value of that clearly isn't zero, because it's $10.
The argument that not everybody could sell their rocks all at once and still get the same price is only relevant if that's what happens. It's like saying your shares in an S&P 500 index aren't worth the market price because of what would happen if everyone sold at once.
Dividends mean that the "rocks" you hold spit out a few pennies magically every so often. While fewer stocks today pay a dividend, many still do.
For holding bonds you get the coupon payment, which again is like your rocks spitting out pennies every so often.
In the real world, companies and governments are paying you to hold their rocks.
That's why the stock market/bond market isn't zero-sum.
By analogy, it would be the value of the currency as a currency, i.e. to facilitate productive financial transactions that would not otherwise occur. The reason non-speculators would ultimately want to have any.
Bitcoin doesn't generate intrinsic value from a business operation - it's just a digital version of a rock. There's no money for it to pay out. Therefore you have to limit the example to the exchange which gives it value, which again is a zero-sum game in a way that traditional markets for business and government equity and bonds is not.
Except that it makes the rocks not worth as much.
You had a corporation with a million dollar business and a million dollars in cash. It pays out the million dollars in cash as dividends. Now the rockholders have a million dollars in rocks and a million dollars in cash, when they used to have two million dollars in rocks. Their rocks decline in value by the amount of cash no longer inside the corporation.
> Bitcoin doesn't generate intrinsic value from a business operation
Sure it does.
Bob wants to buy something from El Salvador, the merchant in El Salvador wants payment in Bitcoin, so Bob has to buy some Bitcoin in order to pay the merchant. The more Bobs there are, the more valuable Bitcoin is as a currency, and the more the person holding the rock can get for the rock.
You, the holder of rocks, get the increase in business value as "rock price appreciation" rather than dividends, but you still get it.
Nope, that is not the way it works. When you have ownership of a company (by holding stocks), the company can pay out a dividend and the price of the stock does not go down. On the contrary, the price of the stock may go up because the company has proven that it generates cash and will pay this cash out to shareholders periodically.
This is why companies viewed as assets have “intrinsic value” and something like BTC does not. If I own stock in a company that pays out dividends and the stock does go down, at least I still get money in the form of dividends. I can be assured that if the dividends continue (not a given), then the price of the underlying stock will “correct” to match the intrinsic value of the company over time.
Contrast that with BTC - I have no real way of knowing the “real” value of BTC. If the price goes down, then it may stay down forever as there is no way of accurately pricing it based on some real-world metric. It produces nothing, therefore this is why some people say it is not a good asset to own.
So BTC for you is at the same time an asset AND a currency ?
How does it work ? It goes to the moon forever, so a loaf of bread cost goes ever higher forever ?
The important thing that differentiates shares and bonds from other assets such as commodities and virtual currencies, is that the former produce income (in the form of profits or interest) while the latter don't.
Imagine you and your friends collect and trade rocks you find on the beach. The more rocks you pick up and put in your personal baskets, the scarcer they become (just like mining bitcoins), so the work of finding more rocks becomes harder. This makes all the rocks you've already found "worth" more. Let's say for this thought experiment that there are 1000 rocks on this beach total.
The value of the rocks is only realized when someone decides they want to pay you dollars for your rocks in your pile instead of going out to pick up rocks themselves. This transaction (say $1 per rock for 100 rocks) now suddenly makes everyone's pile of rocks valuable, because there's someone out there who was willing to pay $1 per rock. If the next person pays $2 per rock for 100 rocks, then everyone's rock piles double in value. This means that the "market cap" for rocks on your beach is $2000 ($2 x 1000 rocks), but that doesn't mean that there is suddenly $2000 of USD in you and your friends' pockets. There's only the $300 that the two buyers paid into the system, but it wasn't generated by collecting rocks.
Let's say that the last 100 rocks are super hard to find - they might be buried deep in the beach and not worth digging with your hands. After a few hours the supply of rocks has essentially capped. The only way to get more rocks for yourself is to trade dollars for rocks. You open your wallet and buy 100 rocks from your friend for $500 dollars.
Now everyone knows that 1 rock = $5. Market cap = $5000.
Someone else wants to buy but it's hard to get anyone to sell. They spend $100 to buy just 10 rocks. Now 1 rock = $10, Market cap = $10,000.
Now that each rock is worth $10, people get shovels and try to find more rocks buried. Finally they've all been found. Let's say that 100 people total are now holding at least 1 rock.
Let's freeze it here and look at who has won and who has lost. Assume that finding the rocks didn't cost anything. From the perspective of everyone who simply picked up rocks, they hold rocks worth $10 each, but haven't paid anything to acquire them. Great right? Well not necessarily - nobody actually paid them anything yet, so they have realized exactly $0 in gains.
Let's look at the four transactions that occurred which gave the rocks value. The first saw $100 go from person A to person B, for a net of $0. The second saw $200 from one person to another, for a net of $0. Third, etc - fourth and final, also net of $0.
Within this example, trading dollars for rocks is clearly a zero-sum game. The only reason that crypto "looks" different is that it's a much larger beach with millions of rocks and millions of people trying to trade them and pick them up. But it's the same thing.