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Author Topic: Bitcoin's Current Market Cap vs. Liquidity  (Read 583 times)
theonewhowaskazu
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November 27, 2013, 08:50:12 PM
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Is currently greater than nearly 40% of the S&P 500...

yet has a minute fraction of the liquidity of any of those...

and isn't traded on any major exchange (although hopefully the ETF will help out a bit with that).

I think I speak for a lot of people when I ask what the fuck is going on here.

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ScrapOfCat
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November 27, 2013, 08:52:16 PM
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A brand new event in human history.  I think even the biggest bulls will soon be scraping their chins off the floor (soon as in 5 years).

Squander electricity on piffle: 1CLQajy22Z2n9YjZurFfPaKApcqsQa8BzK
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November 27, 2013, 09:01:35 PM
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Is currently greater than nearly 40% of the S&P 500...

yet has a minute fraction of the liquidity of any of those...

and isn't traded on any major exchange (although hopefully the ETF will help out a bit with that).

I think I speak for a lot of people when I ask what the fuck is going on here.

A huge portion of that "market cap" is not on the market at all. Add up the inventor's 1M BTC, the FBI's ~150K, many of the large individual strong hands who have several 10K each in cold storage, lost BTC and investment funds such as BIT, and I think an easy 8-9M of the current 12M are not even in the market for trading. These are BTC that are waiting for Bitcoin to take over and are holding out for that. So if you adjust for that, the current market cap of "trading" BTC is actually much smaller and more in line with liquidity.

Think of the physical gold market (not the paper gold market). The physical gold market is very very tiny compared to the amount of gold out in the world. This is the nature of reserve assets held as a store of value, I think we will see similar liquidity for BTC as for physical gold.
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November 27, 2013, 09:08:04 PM
 #4

The most important problem regarding liquity question right now is that it's super easy to sell but it's a pain to enter in the market. Account validation + wire transfer is a huge, huge bottleneck. Consequently it's way more easy to sell than to buy, therefore krach are still to be expected.
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