stocks trade at multiples and represent fractional ownership of companies. commodities are neither. not an apples to apples comparison. I would sure not be buying now. way too volatile
The immobility of many coins makes the rest of them _more_ valuable, not less. Calculating worth of a stock or person is usually pretty inaccurate because it assumes the 1st and last piece of the asset are sold at the same amount, but if something's worth is based heavily on its scarcity, that causes the value to taper toward zero when sold off entirely.
I'd also wager that Bitcoin's market cap is a lot softer once a selloff starts.
Apple stock has a high floor because, as you mention, it represents legally-enforced ownership of a profit-generating entity. Its price is boosted by speculation without being 100% speculative.
Bitcoin, on the other hand, has no intrinsic value. Even if used widely as a currency, its value has a floor near $0.
If you sincerely think that, then you're redefining "intrinsic" in a way that no one else uses it.
A banana has intrinsic value because you can eat it. Iron has intrinsic value because you can make things with it.
Bitcoin has no intrinsic value because it isn't an ingredient for anything valuable, it doesn't give you a legal right to anything, and you have no guarantee you can use it as currency.
Okay, a great setup for an example of what I mean.
Before the civil war ended, I could use the banana as food (which means it has intrinsic value), and I could use the paper money to represent work I'd done which is extremely useful, so useful in fact that I could use it to later buy the banana.
Passage of time occurred, the war is over and now the money is worthless/rotten and so is the banana.
Okay. The other main point I was trying to make is that both the banana and the money have utility (one for eating and the other for saving/purchasing) but for some reason only the banana has intrinsic value? It makes no sense to me.
Is it that everything that's useful, with the exception of money, has intrinsic value?
Also how do you measure/quantify the intrinsic value? Is it derived from supply vs demand like economic value?
This is not what people mean by intrinsic. You can't spend the dollar just because it's a dollar. It requires a huge amount of social structure and (honestly) faith for it to be spendable. You couldn't "use" a dollar if you were the last human on earth.
> Is it that everything that's useful, with the exception of money, has intrinsic value?
Fiat money, collectibles (like baseball cards), poker chips at a casino, gift cards, credit cards, checks... regardless of how useful they are right now for someone, they have no intrinsic value. Their value is imbued on them by the context of society.
> Also how do you measure/quantify the intrinsic value? Is it derived from supply vs demand like economic value?
Mostly you don't. It's more of a binary concept.
There are situations where companies have to do it, like if they're looking at bankruptcy and need to liquidate assets.
For example, if you have 500 tractors and you have no idea how well any of them run, you can calculate the lowest-possible value for the tractor (which would essentially be its intrinsic value) by looking at:
The concept of market capitalisation doesn't make sense for an asset without meaning in its aggregate. If you own every Bitcoin, it's worthless. Quite different from owning a whole company or all the traded copper. (The proper term is monetary base.)
Some guy clones bitcoin in his basement, increases the block size/rate (or something stupid like that to use as a sales pitch), sticks a picture of a moon on it, pre-mines 99.99% and then the next day puts the remaining 0.01% on the market, it's bid up by his friends and bingo, "market cap" of $100B in 24hrs.
