If I understand you correctly, you are saying that value&#x2F;worth exists because of price and a liquid market.  This is incorrect.  Price is independent of value, and does not require the ability to sell.<p>Suppose the government made a law saying that you cannot never sell KO (Coca-Cola stock).  Today KO is selling for $41.62&#x2F;sh.  Tomorrow, is it worthless?  No.  It pays a 3.05% dividend, which it typically increases 10% a year.  It is worth at least $1.27 (the first year&#x27;s dividend).<p>Now to the question about cats selling for $500k.  Would a sensible taxing authority or professional auditing firm assess a flower at $500k - $1 million?  In 1637 a single Viceroy tulip bulb sold for 3000 - 4500 florins; a skilled craftsman made 300 florins&#x2F;yr [1].  Assuming that a skilled craftsman would make at least $50k&#x2F;yr (probably more, given that $50k is near the median US income), one tulip bulb cost $500k - $1 million.  Not so different from selling cats for $500k, so you cannot attack the example for unreasonable prices (s&#x2F;(dog|cat)&#x2F;tulip bulb&#x2F;).  Now, was it worth that price?  No, hence why it fell back to a much more reasonable level shortly afterwards.  But during the mania, selling one tulip in exchange for two lesser-valued tulips would be quite valid.<p>You missed the point of the illustration, which was that price (market cap) has no relationship with value.  Admittedly, the illustration was rather opaque.<p>[1] <a href="https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Tulip_mania" rel="nofollow">https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Tulip_mania</a>