Post #46907 by ges on the US Policy board

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Since Trump is using it for his grifting and the government may actually be buying into bitcoin, the following snippet from a mungofitch post on the BRK board seems worth posting here.

To take a single but important example, the buying power of a bitcoin will top out at some point. As with any non-earning capital good, its price rises only if aggregate demand rises faster than supply, and aggregate demand has to top out at some point, even if (say) the US treasury starts printing dollars to buy them. Since essentially every holder of a coin is holding it for no reason other than the expectation that its price will rise, once the price tops out the sole reason to hold it will be entirely in the past. Some people will realize that quickly, and some will realize it slowly, so the main effect of the whole exercise will be the transfer of actual wealth from the latter to the former. Plus the precisely balancing wins and losses of short term holders during various sub-periods.

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