Investment & Investing

Crypto is rigged to lure people in search of a quick buck... They buy the top and when it sells off and everyone is running for the doors exchanges crash... Or on the flipside when you try to buy the crash exchanges have problems processing the order. I remember the last bull run a few times it has happened. Now I buy when things go silent and front run the panic selling when BTC goes into price discovery. Everytime it hits new all time highs just moves the proverbial goal line

Disclaimer: got a full bag of tether for the capitulation

I don't disagree with what you say, but it's sort of irrelevant to the point I was making - which is that the "market cap" includes coins that (almost certainly) cannot ever be moved or spent, and hence worrying about the market cap and what happens to the "money" when it goes to zero is rather pointless.

Anyone have experience of search funds? Would love to pick your brains as it's an idea I'm looking into

Anyone invested in TikTok?

The Chinese government.

To an extent, the price takes into account missing coins / lost keys. Not perfectly, because who knows if a wallet that has been dormant for 10 years is lost or hodl?

Saylor said recently that he planned to have his keys destroyed on his death, as his gift to every other coin holder by increasing the value of their coins proportionately.

Same place the money goes when a stock goes to $0-10, disappears

The same place my small investment in pedal me went!

increasing the value of their coins proportionately

Would it really do that?

It might. In theory it would by shifting the supply/demand balance but hard to split out the impact from other price movements.

Wouldn't work for fiat currency, eg the KLF burning £1m, as the supply isn't fixed

The "price" does but the "market cap" does not as it is calculated by multiplying the price by the supply. It cannot exclude those "lost" coins, as you say we can't know exactly which are truly lost, but it is clear there is a significant number out there.

I agree

I guess it would have an impact relative to them being sold - but otherwise one person dying and their coins disappearing makes no actual difference right? Those coins wouldn't have been circulating to buy before and won't be after

Theoretically it would, because there are now fewer of them and the potential for them to circulate in future has been eliminated.

In practice, if someone died and their keys were lost, how would the market even know?

Think of it the other way round. If it was suddenly announced that there were going to be 42m bitcoins made, what would happen to the price?

Think of it the other way round. If it was suddenly announced that there were going to be 42m bitcoins made, what would happen to the price?

Depends whether they are going to be made and held, or made and released, which was part of my point!

whether they are going to be made and held

what does this mean?

holding a share (or a coin) does not reduce the number of shares (or coins) in circulation. cancelling a share (or coin) does.

Saylor said recently that he planned to have his keys destroyed on his death

Depends on what they mean by "keys destroyed". Destroying what they think is the only copy of the private key or seed phrase does not irrevocably destroy the coins. But transferring the coins to an invalid address (where no corresponding private key can exist to be able to transfer them on) does "destroy" the coins.

The current estimate is that ~18% of coins in circulation have been "lost" to various degrees. So it's possible to just knock off this percentage from the "market cap" for a less inaccurate measure.

(I agree that the concept of a "market cap" is nebulous, but that doesn't stop it being used widely in the finance world even for normal stocks. Best not to fixate on it too much.)

No agreed, but if someone has always held and boarded lots so they've never been in circulation and they're then cancelled / lost, the number in active circulation is the same isn't it?

hoarded assets are still in effect "in circulation" imo, up to they point that they are irrevocably lost or destroyed.

as the hoarder could always change their mind, they could be inherited etc and placed into the market. most assets are not continually for sale.

I do get that technically there is a chance they can be sold if held by someone unless destroyed, but this sort of assumes that investors are pricing in some sensible fashion based on a knowledge of the total number of coins in existence - but I don't think any real element of bitcoin pricing is based on that kind of technical analysis. Most buyers will have no idea when this person dies + whether his coins are destroyed so I don't really believe that the knowledge it has happened will feed into pricing in any way which is close enough to ascertain...

I can see there might be a different position if the counterfactual was that they were all sold immediately (and that might depress prices)

Depends on what they mean by "keys destroyed".

Probably safe to assume he knows how to do it!

He might change his mind though, so saying he will do it is certainly not the same as it having been done

hoarded assets are still in effect "in circulation" imo, up to they point that they are irrevocably lost or destroyed.

as the hoarder could always change their mind, they could be inherited etc and placed into the market. most assets are not continually for sale.

This is correct. Everything that is not lost/destroyed is potentially for sale, at the right price, time, etc.

But the market doesn't have perfect info on what coins have been lost. Eg there is a chance that poor fucker can get his coins out of the rubbish tip, satoshi might not be dead but biding his time, etc, etc

But the market doesn't have perfect info on what coins have been lost. Eg there is a chance that poor fucker can get his coins out of the rubbish tip, satoshi might not be dead but biding his time, etc, etc

Yeah this is kind of my point - I don't think "coins going out of circulation" that weren't being traded before is likely to ever really have a measurable impact on cost. Even if buyers knew it had happened, no part of buying / pricing bitcoin is based on any real metrics (e.g. what a sensible market cap would be Vs earnings or assets) that would mean a restriction on available coins should directly impact price.

So although I get that theoretically it should have an impact on price, I don't really believe it is that likely to, which is my point

I think the reason why it doesn't seem to have an impact is because the impact of any one set of coins being destroyed is small. But if, as in my earlier example, the supply doubled - or if it halved, then the impact would certainly be noticeable.

David Sachs named crypto czar - which is likely a good thing for btc and other crypto projects

Murica!

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