1 BTC currently is 22,987 USD. "The 2023 Honda Civic has a base MSRP of $24,650" [1]. No sane person, i.e. person not having more money than they can count [2], wanting to buy a car would ever spend the 1 BTC today for a Honda Civic, maybe the 'market' will go up and they will be able to afford a 48K Mustang Mach-E, or maybe it will go really up and be able to afford a 250K Lucid Air Sapphire. Actually spending the crypto 'money' is irrational behaviour, from an economical standpoint: just wait a few months/years, maybe it will go up: crypto forces the users into typical pyramidal thinking, a forever delayed gratification.
Ok. So maybe you can accept as economically rational to spend a few Satoshis for a bagel. Then where do you draw the line where BTC (or the other cryptos) stops being an effective currency? 15K?, 10K?, 1K? Let's say you want to buy a computer: 1 ETH is currently 1,637 USD, one Macbook Pro 13 M2 is 1,300 USD. Aren't you an irrational economic agent if you spent the 1 ETH today instead of waiting a few months maybe ETH will be back at the 4.6K ATH, when you will be able to buy a MacBook Pro 16 with M2 Max?
Yes, stocks are also an awful mechanism through which the East India Company fooled some "spice bros" to give them money for worthless papers. However, no Wall Street person will argue with a straight face if I want a bagel I just have to sell some BRK.A.
One must stop once in a while and ask themselves: what are they are trying to achieve, do they really want to be an effector in maximizing the pain and suffering of the world through vapid technology.
> However, no Wall Street person will argue with a straight face if I want a bagel I just have to sell some BRK.A.
That's exactly what you're doing when you buy something: trading an asset (dollars) that can appreciate in value in a savings account for some good you want or need right now.
Sure, but no one expects that the 25K they have in their savings account to be worth tommorrow 250K. With crypto that could be a possibility, it more certainly could be 0, but a possibility nonetheless. I just don't think a society should have a gambling mechanism as a large scale economic operator.
Arguably a big part of crypto's volatility is because it isn't widely used enough. If as many people traded in Bitcoin as currently traded in USD, I think that would average out most fluctuations.
I'm also not sure how you delineate between speculation and gambling. Are you for the current system of speculative trading of regular currencies?
I could agree in principle on the volume argument, perhaps after looking over some economic models. However, a big part of the USD stability in the past 78+ years stems from the causation chains which make the following fact possible: the US Navy is the second air force in the world [1]. In order to believe in the stability of BTC, I must ask the stalinist question: "how many divisions has Satoshi?" [2]. It is a sad reality but might will make right in this silly world of ours for the foreseeable future. Now that's an invariant which I would have loved to see cryptocurrencies tackle, but they seem to have no interest in this, it's more of a changing of the guard ceremony, this crypto-fiat dance.
Coming to your question, to regulate or not to regulate [3]. I come from the very far left field (pun intended). The most different approach that I've seen recently, one which could maybe move the world in a significant way, is the financo-fiction detailed in Yanis Varoufakis' Another Now [4]. One of the more radical proposals from the book is that the persons starting a company should have only one share each: more of a library card system than a market. In another presentation, Varoufakis says something along the lines: compounding interest becomes a tool of exploitation when the poor are forced to borrow more and more from the rich which only get richer. Therefore, no, I am against the status quo as much as you can get, and although I am not an optimist, I believe it is up to us to decide in what kind of world we want to live and what kind of future we want to nurture.
[3] I asked ChatGPT to make a poem starting from Shakespeare's verse:
"To regulate or not to regulate, that is the question asked,
Whether 'tis nobler in the realm of finance to keep markets free,
Or to take action against the sea of risks and save us from a crash.
The pitfalls of speculation oft bring economic pain,
Should we not protect, regulate, and keep it in check to gain?
The choice is ours, the consequences dire,
Let us ponder, deliberate and make a wise decision, not retire."
The difference is stocks have a reliable basis for going up based on an underlying asset that generates wealth. Most crypto is backed by nothing, some is backed by other crypto which is also in the end nothing.
Generates what wealth? Dollar "wealth" which is also backed by nothing.
There is no such thing as intrinsic value, value is only ever determined inter-subjectively. Crypto has value as long as people want it, just like every other asset or currency.
> The difference is stocks have a reliable basis for going up based on an underlying asset that generates wealth.
In theory, in practice it's a supply / demand game that can be manipulated by news, sentiment, and rich people.
Tesla does not have the underlying asset that made its stock worth as much as it did. It is/was a small player in the car manufacturing world in terms of sales and profits etc, yet its stocks and the company was somehow worth more than all the other car manufacturers combined.
It's a deflationary currency. I hear the country got into trouble with those 90 years ago, but if the only alternative is a hyperinflationary currency, the dynamics of a deflationary currency might be a danger worth approaching.
It's not so much a deflationary currency as an unstable one; its value has gone from $100 (or even less, the charts don't go back that far) to over $60.000 and back to the $20.000 range. That's incredibly unstable and not something I'd willingly would choose as a currency.
If by some weird magic I had today all the BTCs forever locked in Nakamoto's wallet, currently around $23 billion, I would give them all away just to be able to live in 2140, the year the last BTC will be mined. So I guess BTC is actually a currency after all, haha.
1 BTC currently is 22,987 USD. "The 2023 Honda Civic has a base MSRP of $24,650" [1]. No sane person, i.e. person not having more money than they can count [2], wanting to buy a car would ever spend the 1 BTC today for a Honda Civic, maybe the 'market' will go up and they will be able to afford a 48K Mustang Mach-E, or maybe it will go really up and be able to afford a 250K Lucid Air Sapphire. Actually spending the crypto 'money' is irrational behaviour, from an economical standpoint: just wait a few months/years, maybe it will go up: crypto forces the users into typical pyramidal thinking, a forever delayed gratification.
[1] https://cars.usnews.com/cars-trucks/honda/civic
[2] https://en.wikipedia.org/wiki/Rational_choice_theory