The intellectual incoherence of cryptoassets
I was in crypto for part of the run earlier this year, but ended up selling it all as I reached a very similar conclusion to the author.<p>Basically ask yourself this. If there is a market panic, or people just decide to sell for whatever reason, what is the logically lowest price bitcoin can go to?<p>The answer, of course, is 0. There&#x27;s 0 intrinsic value or math you can do to justify one price over another. Can you explain to me why Bitcoin should be worth 50k and not 10k?<p>The stock market can crash too, and prices can fall below intrinsic value for a time... but you have plenty of math and formulas you can use to assign an intrinsic value to equities. Sometimes the market bubbles up, but in the long run it always tends to revert to some mean of fair valuation. There is no mean of fair valuation for cryptos.<p>Another thing that&#x27;s difficult to get around is application of the block chain. I can buy that there could be an &quot;open source&quot; ecosystem of finance, but where is it? Almost all Defi stuff only makes sense in the context of crypto... e.g. get interest on this coin by lending to somebody else, but the coin still has inherently 0 value. Would be nice to see some inkling of any value that can be directly tied to the real world. Anyone aware of meaningful projects with an actual substantial impact, that can&#x27;t be solved better through other means? Not toy projects, but an actual gamechanging application in finance?<p>I can buy that Bitcoin could act as a deflationary sort of money. But the value of bitcoin can&#x27;t really be stable unless it&#x27;s actually used as a widespread medium of exchange. I don&#x27;t buy OPs arguments about central banks... central banks are a large part of why cryptos are so popular. They&#x27;ve horrendously extended the scope of their mandate and abused their powers. Part of bitcoin&#x27;s popularity is to try to escape the overreaching central banks.<p>The closest analogue is Gold. Gold actually has many powerful chemical properties, but is too scarce to use for industrial production by and large (outside of trace amounts). Yet people have used it as a store of wealth for thousands of years. Because of this, I think bitcoin could have potential long term.<p>But gold is physical, so it&#x27;s not prone to panic selling. You  have to physically transfer it to somebody else, so it&#x27;s more protected from flash crashes that crypto is prone to. Yes, there are gold derivatives that are traded, but they reflect a real good underneath.<p>At the end of the day, why are 90% of people in crypto? They&#x27;re doing it to speculate and make money, not for practical reasons where holding crypto actually tangibly improves their lives (via some utility of it). I don&#x27;t think prices will ever be stable while that&#x27;s the case.