Topic: Seriously. How much market cap can Bitcoin absorb from other assets? (Read 289 times)

My problem is with these predictions is that bonds, stocks and real estate mostly are assets which have also "use value" (as classical economists and Marxists say), not only "exchange value". These assets serve to satisfy a need of people:

- real estate - to live in or to do business in them
- stocks - as they're shares of a company they could be seen as the equivalent of a share of the "infrastructure needed to produce goods and services" (which, again, satisfy needs of people),
- bonds - very much the same than stocks, only that also states can use them, in this case they're are shares of other kinds of infrastructure (justice system, social security, defense etc.) which also satisfies needs.

Bitcoin can absorb a part of the "market caps" of these assets, but only a relatively small part - the part which corresponds to the overvaluation of the assets due to speculation. I expect this not be more than 30% in extreme cases, more close to 5% in normal conditions.

Take stocks for example: let's consider Bitcoin has absorbed a part of their market cap, leading to a smaller stock market. But likely, value investors would see an opportunity to re-invest in stocks because they are shares of "real things" with "use value" and also produce real cash flows like @Kyraishi wrote. Even derivatives have connections to that value, while the Bitcoin value proposition is much more abstract.

I very much agree with this quote from .@stompix:


However, I disagree a bit with respect of gold, and here I'm more optimistic. Gold (ald other precious metals) is a hybrid case. It has some use value (industry, jewellry), but most of its value is speculative. Even if we concentrate on jewellery - if gold wasn't as valuable as it is, then people wouldn't like jewellery as an investment or as a marriage/engagement gift. There is also an important psychologic factor.

Imagine Gold crashes 70% because banks/central banks divest it and instead prefer Bitcoin. Some (mostly older, traditional people) perhaps will take the opportunity and buy some gold jewellery, but it would be seen generally as something "cheap" and out-of-fashion. Like Bitcoin when it's "dead" again. Young people from the FFF generation will probably prefer jewellery made of 100% scrap metal recycled 100% with renewable energies.

So yes I think Bitcoin can "absorb" a large part of the gold "market cap". Maybe not 95% of it like the OP wrote but perhaps 50-80%. But with respect of the other asset classes it's imo only a tiny fraction.

Well bitcoin cannot really absorb 100% of the market of gold, the value of gold is mainly derived from two reasons, the first is its value as a metal, gold is used in several industries and it is obvious that bitcoin cannot steal that market cap as bitcoin is digital by nature.

The second reason gold has value is due to being a store of value, if bitcoin becomes the preferred form to store value then gold by necessity will lose market share and will go down in value, however I do not think this is something that is going to happen immediately and it will take time to materialize.

Once again gold could become as easy to get as aluminum.

In the 1800's aluminum was hard to get and was costly. Tech got better and it became cheap.

Those huge astroids are know to have 1000x the gold mined here.

Moving them to the moon and landing them on the moon may become feasible. Due to  lack of moon atmoshere and 1/6 the graivty of earth moving an asteroid safely to the moon is possible.

Having a solar powered magnetic shuttle to earth from the moon may or may not be possible but if it is.  Gold will become common as copper. Still be very useful just not that valuble. So betting on gold 11 to 1 over BTC may be dumb as can be.

Think if you had bet on aluminum over gold in 1850 you would be crushed now.

Same can happen to gold vs BTC.  real estate  vs btc is different as real estate does seem to be more limited than gold.
Terra forma the moon or mars  seems harder than getting 1 asteriod  safely down to earth.

Bitcoin has already reached $1 trillion marketcap during its ATH, It's possible that it could rise further but I'm just not seeing it to be bigger compared to gold which is currently at over $11 trillion, with the current nature of the market, it will not gain a massive adoption especially from investors who are not up to taking high-risk investment. I could be wrong as I never thought from the beginning that it would reach this high in just a very short period of time, but that's my stance now, gold is just superior IMO.

And that is just Bitpay. There are tons of other payment processors apart from Bitpay like Coinpayments and in Asia we even have PundiX though it seems to be on the downtrend. I just saw a processor called Coinspaid that has also processed billions of transactions (but as 3rd party for other sites so they are not famous),,, the numbers are staggering, we just do not see them

I didn't know about the 1+ billion dollar payment processed thing, that is huge number honestly for just one company, because let's be honest we do not pay just from bitpay as well, I never used it and I still paid so much and that is why I believe that we should not be considering any problems at all believing the real number is about 10+ billion dollars a year just on payments.

This is something people mainly use as investment at this point, not even store of value because they trade it but having 10+ billion dollars spending with the thing that people usually invest sounds insane.

Yes, I believe that it is a currency as well, but I still didn't expect that part of it being at the forefront of the usage, I was expecting it to be a lot lower because mainly people use it to make more fiat and not to use it for buying other stuff.

There is really no telling how much. Nobody could predict it with accuracy. We can only speculate, but our speculations are of course merely guesses. What we can be sure of I think is that there is indeed a kind of shift from traditional assets to new kinds of assets like Bitcoin. There are reasons for example why Bitcoin is considered the new gold. To someone who is more inclined to rising digital technologies, Bitcoin might be preferred more than gold.

I think it is very difficult to find out how much bitcoin can absorb market capitalization for other tokens, especially when market conditions often go up and down. yes bitcoin has entered the crypto currency with the largest capitalization in the world.

As people are tend to switch over to which investment is too hot for better returns then we could see all these to be happening obviously. From marketcap of $1T to $10T may not be a big job which will be true for the case of $100T as well because marketcap is just a number and no one will be needing to buy $100T worth of bitcoins to make bitcoin marketcap to be so. This way, we may see bitcoin to be worth more than $50M as well.

For the main question of this discussion, I will simply answer like bitcoin will absorb from each and every category of investments. Because, every human will love bitcoin for its unbelievable returns. So, just keep holding is the only thing, we need to do to ensure that we are also will be enjoying such huge returns.

Look, I'm not going to discuss this any further with you because it's clear that we're not going to reach an agreement. I don't know if I didn't explain it well in the OP or you didn't understand it well, but when I talk about Bitcoin absorbing market cap of other assets I'm talking about a years long process.

In my view, as of today Bitcoin has already absorbed some market cap of gold. Most of the money that has been put into Bitcoin, if it had not been invented by Satoshi in 2008, would be in the market cap of gold today. And for that it hasn't taken people selling nearly $1T in gold to buy Bitcoin.


You have made me think, because it is true that for example gold today is a store of value and practically not used as a currency (unlike in the past), while a lot of transactions are done in Bitcoin every day.

Well,,, we have to admit that most of us are in Bitcoin because of the potential for financial gain. I love how Bitcoin provides an alternative for those trapped in a system they do not benefit from or are restricted but most of us forum users at most use it as a better means of payment or like for me, from gambling. So you should expect people to have unrealistic expectations and perhaps thanks to them holding on for ever,,, we enjoy the benefits better;)

I never said "it is going to end up being a currency"! Bitcoin IS already a currency. In fact the only reason why it can also be considered a store of value, etc. is because it IS a currency which is its main utility that is giving bitcoin its value.

People have been using it for payments for a very long time. For example Bitpay used to report $1 billion worth of payments processed (>90% of it was bitcoin) annually last time they released the number which was before they stopped (right after they got their virtual currency license from the New York Department of Financial Services). And that's just BitPay which is not the best service to use, it is centralized among other issues. There are a bunch of payment processors and merchants can always accept bitcoin directly.

In other words bitcoin has been fulfilling the role of a currency in range of trillions of dollars every year.
The fact that there is a small rise in number of people who are making payments with shitcoins doesn't change the fact that the above number about bitcoin payments is growing tremendously.

Coin is very easily fully crash-able. it simply is in abundance according to this:

https://www.techtimes.com/articles/263854/20210806/nasa-plans-study-mine-goldmine-asteroid-worth-quadrillions-2026.htm

which is a follow up of this

https://www.foxnews.com/science/nasa-headed-towards-giant-golden-asteroid-that-could-make-everyone-on-earth-a-billionaire


So rare and precious metals may not be so much in 10-15 years.

A lot depends on easy space travel. Maybe a magnetic elevator system to the moon.

And really cheap metal happens before boomers die off. Figure boomers are all dead myself included by 2071.

I am thinking That those astroids will be harvested in 2030-2035. I would be 73-78 years old. So I simply do not see long term value in any precious metals at all. Even in my life time.

Remember the moon’s gravity is 1/6 that of earth. so landing pieces of asteroid there is feasible .

whether a magnetic levitational setup from earth to moon is doable how on earth do I know.  But betting all my money on metals staying high in value is dumb as fuck.

I still have coins silver platinum just not as much as I did.

BTW

history backs me up on this.

Aluminum dropped price when tech made it easy to get.

stainless steel dropped in price. can't find a good chart for it.

but aluminum dropped a lot. 17 a pound in 1851 to under 50 cents now. add in inflation and it got crushed.


https://www.theatlantic.com/technology/archive/2014/11/aluminum-was-once-one-of-the-most-expensive-metals-in-the-world/382447/


usa gold price in 1851 was 20 bucks an oz it would be 75 cents an oz  if it drops like aluminum dropped.

And it was all due to tech advances .

I don't know how much but there are a lot to be absorbed. There's a significant portion of gold's market cap. There's also a significant portion of silver's. And probably other metallic stores of value. The traditional market has stocks and bonds. A good portion of these will also be going into Bitcoin. And there are a whole lot of savings by ordinary people that are sitting in the banks earning almost nothing or even a net negative after inflation is factored in. This last one alone is probably enough to push Bitcoin's price a lot higher.

It's a bit ridiculous to say that bitcoin is able to absorb the market caps of shares and real estate in my opinion.

Shares just have way too much market capitalization, and they generate cash flows. So they appeal to another class of investors altogether.

Real estate can be speculative but I'd say at least half of the population actually live in their real estate "investments". BTC could divert some assets away from real estate bonds but not real estate itself imo.

Many people are overreacting on how much they could make with a bitcoin investment, and that is why there is a need to know how high it could get, and the reality is that if your only aim is to keep making more and more money then maybe bitcoin is not for you.

I am not saying do not make any money from bitcoin, of course you will want to make some profit, but it can't be 420 trillion dollars worth of money as we all know, we can't just hope for 100x on bitcoin as well, what we can do however is the fact that we could make some money, not a ton but some money and also use it, and store our wealth at the same time. This is the greatness about bitcoin, you do not lose networth and that means a lot.

I don't think we'll get to those crazy numbers because a lot of the money that's going to flow into the market will be in banks, companies, third parties that own bitcoin and give people coins of the same value as bitcoin (the same money-printing model where it's printed indefinitely.)

In fact, people will help governments with this. Many of them trust USDT just as they trust the paper dollar even though we all know that USDT doesn't have all that value as money in them bank accounts (1:1.)

This is not strange considering that this is a Bitcoin forum, but we are still a very small community if we take into account the number of active members. The vast majority of people in the world have a very difficult or no understanding of Bitcoin, and it will take a long time for new generations to perhaps change the way people view gold compared to Bitcoin.


Because of what I've already written, I don't believe it's possible, at least not in the near future - but if Bitcoin survives for the next 10-15 years, I think it will be much better positioned by then and most people will understand it much better than they are today. Big changes never happen overnight, and 10 or 20 years is a very short period of time for people to reject or largely replace traditional ways of investing with something completely new.

Better I do not know,,, easier to own, easier to keep, easier to sell, yes. Gold keeps value much better than Bitcoin though, as it is more predictable and less volatile. Bitcoin over 5 and 10 years yes, but if you suddenly need to sell your BTC within 2 or 3 years of buying it, be prepared to sell at a huge loss. Hence not a store of value equal to gold, hence not much absorption from gold market cap.

Man, it's pretty simple.
You can't absorb anything from a community, company, people who own something if they don't want to.
If people owning bmws are selling bmws and buying again bmws no other company will get any of their market share, there will be no absorption of buyers. Same for gold, if people will not sell gold and buy bitcoin it doesn't matter if bitcoin goes 1 billion times up in price there was no absorption.

Your title was about people dumping other assets in favor of bitcoin, not about inflation, when you mention absorbing six times and inflation once I think it's pretty obvious what was intended to be discussed. And no, bitcoin will not absorb 80% of the money people have invested in gold!