"akin to a stock but based on nothing" so the rest of the sentence was a valuable read

5

That’s true, although there is always an inherent demand for things like water and people have valued gold since ancient times.

1

Anonymous centrist 26w

sorry youre gonna have to connect the dots for me what does that have to do with cryptocurrency that it wouldnt have to do with anything else

1

Anonymous #2 26w

part of the issue is that it’s still based in faith but that faith is not standardized or enforceable currently

1

stock is based on performance of company. company does poorly, value literally goes down. unfortunately, stocks are also kind of complete bullshit thanks to buybacks, which inflate the value even if the company is doing poorly.

1

Anonymous #2 26w

sorry i was talking about crypto, so as far as stocks go i agree (tho you could argue that the company doing well has to do with the faith of the consumer but that has a more material basis)

1

based on future performance of the company. if it doesnt meet that, it tumbles. if they dont make deals or things fall through, it tumbles. its tied to performance, sometimes perception is on the future but the future arrives and becomes the now. its not common that a company stays in the future perception for so long

1

buyback isnt just supply vs demand it literally affects the eps, because the shares outstanding (denominator) is affected

1

yall i don’t disagree im just saying the only reason any of this works is because we say it does 😭 materiality is the only thing of real value. if the material is obsolete or not useful anymore then people lose faith etc.

1

Anonymous #3 26w

and ik they aren’t entirely based in that materiality i was just saying they’re more tied to it than something solely faith based

1

shares outstanding is supply, yes. but the metric which is based on supply to determine how valuable the share is, is also dependent on performance - demand is based on performance. people sell when performance is bad, or perceived performance is bad. perceived performance is also based on something. meta stock dies when theyve got 9 antitrust lawsuits because that is material

1

Anonymous #4 26w

Case in point, the decentralized argument evaporates when you’ve got Peter Thiel and entire private equities and even banks buying it up just to sell it for greenbacks later at a profit. Institutional interest is not a good thing. It’s for pumping the price and leaving you holding the bag later

1

performance and perceived performance are very real and what ties stocks to reality. its not a 1-1 tether, but it is based on performance. im not for this system, make no mistake. i do believe there is an ai bubble, but thats not just stocks involved. money is flying around and that means something is happening, so stocks go up, but i think that money is being burned

1

there is a very material aspect to investing but tesla being where it is or nvidia and amd being where they are isnt really material anymore. just like gamestop or whatever else wasnt tied to performance.

1

Anonymous #2 26w

yes i agree, i think we might just using different terms here. i’m calling perceived performance or collective agreement here faith (faith in the product/company, faith in the returns, faith in growth etc.) that faith *can* be based on actual performance though doesnt have to be, like you said not 1-1. so more beholden to the material nature but always.

1

Anonymous #3 26w

but not always*

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Anonymous #3 26w

and all of these things have real consequences as well so i’m not saying that faith isn’t “real” just that values aren’t inherent

1

Right, but people don’t roll up to McDonald’s asking to pay for a quarter pounder with stocks or a barrel of oil do they? Cryptocurrency is not a currency. No one uses it as a currency, outside of people who have something to hide.

1

There are cases like that for sure. But for the vast majority, stuff like Zelle and PayPal and Cashapp is more than enough. Without having to deal with vastly floating exchange rates. Also, I am not a fan of the tax BS on crypto trading. I gave it up years ago, when my exchange went under and I needed cost basis

1

p/e... is calculated with eps as the denominator. eps is affected by supply change. my example about meta was abbreviated. meta (maybe it was google? idr) faced a bunch of antitrust lawsuits, stock tumbled. they beat one, stock rose back to where it would have been, assuming performance is normal. amd and nvidia shot up iirc in past 48 hours because of their deals (performance) with each other. again, all to say stocks are based on something. its not just faith or random perception, like crypto

1

pe ratio = price/eps. market cap is determined by price * shares, not the other way around. price is not calculated. a buyback impacts shares outstanding, which directly affects eps, which directly affects pe ratio. all of which is irrelevant to the statement that stocks are based on something, crypto is not. im mighty fuckin confused by you *calculating* price

1

why would you need to calculate price???? its an independent variable in the equation, why are you starting from market cap? im not mathematically illiterate, what youre doing is just nonsensical. and buyback literally does impact pe this is readily available information online man

1

what the fuck are you talking about man where is this coming from. market cap is not the independent variable what the hell. who or what is telling you this stuff?????

1

we cant agree on the literal most simple thing, youve gotta help me see whats going on here before we can talk about anything else. please show me who or what is telling you market cap is independent and determines share price

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Anonymous #2 26w

clearly this has been seen but no response. ?

1