Topic: Supply & Demand :: Bitcoin+Altcoins & Consumer Investors (Read 469 times)

I don't think this is true. Strike is bitcoin only, IIRC, and there are other similar bitcoin-only services. But, yes, pretty much any exchange accepts more than bitcoin and fiat.

You keep throwing this everywhere as if it's a solid fact. Do you have any evidence to support that most people who buy bitcoin as an investment or store of value, keep it on a broker app? I've met several individuals involved in the space, and the only ones who used third parties were either day traders or people who had no idea what is bitcoin and just wanted short-term profits. Everyone else practices self-custody.

Bitcoin is in a rather special place due to its dominance and institutional adoption. With over 50% of the market share of cryptocurrency taken by Bitcoin in 2024, events like the Bitcoin ETFs, each attracting billions of dollars in investments, give even more support. Even though some altcoins might give you quicker or cheaper transactions, Bitcoin's got that "digital gold" vibe going on and is clear on the regulations, so it's still the go to for big-time investors.

Furthermore, market cycles suggest that Bitcoin tends to lead price movements and capital does not tend to flow into altcoins until after Bitcoin's rally stabilizes. This interplay between Bitcoin and altcoins shows that they are not interchangeable but serve very different roles within the ecosystem. The scarcity of Bitcoin and established trust make it more than just one among many; it remains foundational to the cryptomarket and influences how other assets perform.

I think we are saying many of the same things here: yes, Bitcoin is the oldest. But as we've seen over and over again in every aspect of capitalism, the "first mover advantage" quickly fades. Some old brands have held on (by drastically changing the products) but most fall by the wayside because they can't evolve.

And if you don't think there are lots of people convinced Bitcoin cannot possibly go down in price you... don't read enough posts on Bitcointalk .



All I can say is that this conversation is about ten billion lightyears from any consumer investment decision today. Nobody cares about any of this when they click on the "BTC" button on their investor app versus "XRP" or any other symbol.

The key to understanding any market is to truly understand how the product in that market is actually used. Right now BTC is a speculation instrument alongside thousands of others--but it happens to be the best known (but that can change over time).

Based on it's technical limitations, Bitcoin will never be able to compete with newer approaches for things outside of the realm of investment instruments. As such, many of Bitcoin's competitors can do what Bitcoin does--as well as other things Bitcoin cannot do.

When you evaluate any technology, always try to understand what actual problem it is solved: how does it make people's lives better? Then, ask yourself what products in that technology area solve that problem the best.

Saying a product is expensive to produce, for instance, is not a value to any consumer. In fact it's a disadvantage.

ethereum is no longer PoW, but changed to PoS meaning its minting cost dropped 95%
if you realise that each participant in the block minting process is simply a pc and look at how low the wattage of a pc is these days just to sign over value, you will soon learn the validators that have value locked in as stake and participating, brings the cost of minting to be a low number


i have not come across any site, but there should be one.. but here is the thing, as soon as this information becomes public, people the in droves use and abuse the information.. so i and many whales prefer to manually calculate it and use it for personal analytics

but yes looking at any PoW coin and checking the hashrate and then doing some mining cost calculations using a base cost of this generations hardware(network hash divide by this gen asic hash=total asic units multiply by unit cost) then split over 2 years of coins produced by network to get a fair ROI of hardware.. then add electric at a reasonable base of $0.04 per kwh for number of units, then divide by blocks of the hour then coin per block you can get a pretty good idea of the bottomline support 'value' per coin that sustains any PoW coin to then speculate above

then looking at the market price of said altcoin of PoW, you can then look at how bubbled/pumped/premium the price is compared to the base support value to decide if its a good cheap buy vs a over speculated premium

Really? Bitcoin's main advantage is being the oldest and most trusted cryptocurrency. The biggest community of crypto supporters stands behind Bitcoin, not behind some obscure altcoin. Bitcoin has built it's brand and that brand is globally recognizable. OK, Bitcoin isn't the cryptocurrency with the most low cost transactions and fast transaction speed. That's fine and the people are free to choose between faster altcoins. I have nothing against the diversity and competition in the crypto world. Who the hell thinks that BTC will NEVER go down in price?
Of course that Bitcoin will go down in price(sooner or later). This is a volatile market and price drops are as normal as price pumps.

I bet other coins will be ETFs soon. What is to stop a thousand new ETFs based on digital currencies? Nothing.

And I really don't think anybody in the US cares that much about what El Salvador is doing .

El Salvador would have been better off using XRP for their currency, or even better, their own currency on the Haypenny platform. That way they could actually get all of their people using a digital currency, not just have a silly experiment.

But this point keeps coming up over and over here: when it comes to investing in a digital currency, consumers have a lot of "supply" to choose from, not just 21 million Bitcoins.

Although it's true, but the good thing is, Bitcoin the only one cryptocurrency that have ETF version which has been accepted by SEC and the only one cryptocurrency being a legal tender.

Which make it's too big to fail.

How can I learn this one?

Is there a site where they show the minimum cost to mine/mint per each coin/token?

It can be one of many way for me to take a consideration before buy a coin/token.

If we still remember, altcoins  gained massive attention during the 2017 bull run, but many investors jumped in, lost money, and tarnished the altcoin market's reputation. The data below doesn’t help either, it’s unappealing, and once trust is broken, it takes a while to rebuild.

https://en.wikipedia.org/wiki/Cryptocurrency_and_crime

You can’t blame people for trusting Bitcoin more than altcoins because of this reputation. Fixing that trust will take time, along with strict regulatory measures.

Unlike Bitcoin, which people view as a solid investment, altcoins often struggle to show their true value upfront. Add to that the flood of repetitive altcoin projects, it just confuses people even more.

And another problem I see is that exchanges don’t help much. They’re quick to list any hyped coin because they’re chasing listing and trading fees. So without stricter regulations on altcoins, trust in this market will remain limited.

Many altcoins are decentralized. But consumers don't care about decentralization anymore, and most people buy their bitcoin using an app or a broker or through an ETF.

For almost all investors in Bitcoin today, Bitcoin is just a name on an investment app or in their broker's screen.


Nobody even knows what that means, let alone cares about it. Most consumer investors looking to make a profit from Bitcoin aren't trying to avoid their government finding out about their holdings (nor could they since they mostly use centralized, KYC'd brokers to buy Bitcoin).


Again, as I said in the OP, there are hundreds of established altcoins out there now that are very stable and clearly are not scams. Consumers have a lot to choose from now.


The Volvo gets the best security rating of all of the cars, yet Volvo's market share is less than 5% of the market. Why is that? Because most other cars are pretty safe too, and consumers don't don't care about the difference between "super safe" and "super duper safe".

How is the 21 million Bitcoin cap defined and enforced?
Controlled supply.
Why is Bitcoin’s supply limit set to 21 million?

Who did say it?

Bitcoin has its market cycle that binds with Bitcoin halving every 210,000 blocks and in each cycle it has red and green years.

https://charts.bitbo.io/yearly-candles/

In block size, transaction time and on-chain transaction fee, Bitcoin can not compare with many altcoins, but it has several things that none of altcoins have.
- Decentralized.
- No censorship.
- No smart contract to rug pull, mint massive new coins, no way for founders, developers or governments to freeze your Bitcoin wallets and seize your bitcoins in your non custodial wallets.
- Best blockchain in security.

https://howmanyconfs.com/

firstly basing a thesis (university level) on highschool level means you miss many points

secondly.. no desire is not the same as demand
demand is the actual people willing to hand over money for an item on the market.. desire is just the fanclub, emotional sentiment of people who know and like what they see in media /life and wish they could have it

my point was more of the supply side.. because although the total supply went from 10.5m to 19.8m between 2012-now.. the exchanges never actually had 10.5m-19.8m... the exchanges(market that set price) only had ~ 5m->2m on the market supply

other factors in play of market setting prices is that people dont trade whole btc..
did you know that a market price can change wildly without the need of large/small supply..
a market can change by simply the price differences between each order

EG even with just 0.01btc supply and 5 people wanting 0.002btc each, the price can be different in 2 scenarios
where by the sell orders are

0.002 $97800.01       vs     0.002 $97800
0.002 $97800.02       vs     0.002 $97801
0.002 $97800.03       vs     0.002 $97802
0.002 $97800.04       vs     0.002 $97803
0.002 $97800.05       vs     0.002 $97804

same supply same demand, yet one version the price only changes by 4cent the other changes by $4
..

but with all that said, bitcoin is not reaching ~$98k purely because "first crypto' or "21m".. its up at this level compared to other crypto, because bitcoins cost of mining is ~$50k at the most efficient method on planet. meaning no one wants to nor willing to sell below $50k, and if the market ever did test the new bottom everyone would want to buy it at new bottom because there is no way to obtain it any cheaper by any other method(like mining) so it sets the bottom value support currently to be at $50k as something to start the speculation above that amount.

where as other cryptos underlying value is far lower

did you know that ethereums minting cost is only $50.. meaning that the speculation premium of eths todays price is 68x
where as bitcoins base mining cost is at about $50,000.. meaning that the speculation premium of btcs todays price is 1.98x

also the reason why eth is speculating at such a premium(way above base cost) is not because everyone loves and wants eth..
its at a inflated bubble premium because bitcoiners are manipulating the price of eth by using it as a arbitrage route when trading the bitcoin markets, causing eth to inflate even without anyone really holding onto ethereum for very long

in short the ethereum market price does not correlate to how many people which to adopt and hoard eth long term. its just a market tool for people to loop through other coins to get back to btc's main market pair

and as i said about desire people dont need to demand btc from the market. they can desire to have bitcoin via mining or selling goods or other methods of utility to get bitcoin unrelated to market purchasing
the desire for bitcoin is different to the market demand

1. Yeah I agree first mover advantage doesn't last forever but they fail because something came up that was better than them in what they do.
Don't forget it's the standard of digital assets
So if another Bitcoin can exist with same history that surrounds Bitcoin,trust,adoption and community
Then it's possible.

2. Yeah profits beats decentralization, that's because many haven't been educated or see the essence of decentralization and disadvantage of centralization.
If Centralized system was so good, Bitcoin wouldn't have survive this long.
There are People that still care about Decentralization and might increase as Centralization continuously fall.

3. Again education and lack of knowledge. As adoption increases the vulnerabilities of these 'safe' tokens would become more pronounced.

About the inflation you had to give example with lands and APPL and not other cryptocurrency.
They can resist inflation but for how long
There's a reason many tokens with great utility has spranged up and died but Bitcoin still remains.

I agree with some of this:

1. Yes, Bitcoin came first, as I illustrated in the OP
2. Yes, Bitcoin is "more decentralized" than any other competitor
3. Yes, Bitcoin's platform stability (security) is higher than that of other coins

But my counterpoints are:

1. Being the first in the market only lasts so long. Most of the products people use on a daily basis are not the first company on the market. Why? Because markets quickly evolve and competitors come in.

2. More and more, consumers demonstrate that they don't care about "decentralization" and they don't even know what that means. Most altcoins (starting with ETH) are defacto centralized, and yet millions still invest in them. And most people use an app or a broker that's centralized anyhow. And then there's the ETFs. "Decentralized" is simply not a value that drives the market anymore.

3. Bitcoin is theoretically safer than many other platforms like ETH and Solana, etc. but... how safe do you need? Are people really concerned that their ETH is going to go disappear because the network gets compromised? I don't think so. The top-100 major digital currencies out there would appear to most people as... perfectly safe.

As for inflation, that's circular reasoning: any investment that performs better than the USD will "resist inflation". There are billions of acres of land in the USA you could buy in order to resist inflation. APPL resists inflation, as does NVDA, and so on. Of course these things can go down in price, but so could Bitcoin. Saying this is like saying, "Bitcoin is going to go up in price because Bitcoin is going to go up in price".


Are high school economics wrong? There's always more to add in top of basic principles, but that doesn't mean the basic principles themselves are wrong.



Yes, "desire" is just a synonym for "demand" in this context. I'm not sure what point you are trying to make (?).


Because there are millions more consumer investors wanting to buy digital currency now. Hence much greater demand. You are making my point for me here: the supply of Bitcoin doesn't really matter as compared to the demand.

And my thesis is that much of the new entries into the market are not yet aware of competitors--but the entire industry is very busy trying to teach them (and they have $billions in rewards by teaching them).

You explained the basic concept of demand supply and quantity availability, the reason why Bitcoin has been the major coin in the market is because of the static status of the 21 million supply, which by now has been reduced to almost half due to lost bitcoins and satoshi inactive wallets, so for sure bitcoin supply is now far lower that then demands a d this has caused a tragedy in the chain that makes bitcoin very expensive with low availability because those that gold bitcoin ain't willing to let it go by now.

So for sure this and many more have been the basis of Bitcoin value, liquidity and supply, and I believe we are still at the bottom of the ladder yet, as for Bitcoin, because a lot is still ahead and many more prices and market demands in going to spring forth as time goes on

You make a valid point and yes Demand is needed to complete the equation.
But scarcity isn't Bitcoin only advantage and edge.
Bitcoin still enjoys first mover advantage and has the largest and most established network
Which gives it edge in security, liquidity not to mention it's decentralization.
These has made it an attractive asset in the eyes of institutional investors as a store of value
And hedge over inflation.

Despite its simplicity and inability to perform complex utility
It has already built a form of Goodwill in the minds of investors that can be overlooked.
Though they have utility, what comes first is security, Consistency and ability to resist inflation.

you are using highschool economics

its not as simple as if there is more supply the price is less.. the lesser of supply the more the price
the actual economics is that there is a base cost of creation, where by if no one on the planet can make something for less than X, then no one wants to sell for less than X

then beyond that is the speculation above X based on many factors, one of which is availability(supply)
other factors are its utility, need.. its desire, and its popularity in trends/virility

but here is the thing
bitcoins 21m limit has nothing to do with market price setting directly because market orders are based on pricepoints of only selling 0.001-0.05btc
where the whole market orderbook is usually only about 200btc on the orderbook total and only maybe storing 2m btc in a exchange as a bank/custodian.. meaning the supply affecting price is no where near 21m

lastly, if price suppose to decrease with more supply then (rhetorical) why was the price $6/btc when there was only 10.5m btc but now its over 19m btc the price is 1500x more

..
there is a huge reason why other coins with less mining/minting costs have a lower price/speculation window

What drives prices in a free-flowing market? Supply and demand.

Here's what the "supply" looked like to average consumer investors in years past:

* They have only heard of Bitcoin
* Their mechanism for buying digital currencies only allows Bitcoin
* Non-Bitcoin alternatives are new and scary, and there are a lot of reports of them failing
* What few competitors Bitcoin has don't do anything that Bitcoin doesn't already do

Here's what "supply" looks like today:

* There are thousands of currencies out there people have heard of
* Many of them have big established brand names like ETH, DOGE, XRP, etc.
* Any app that allows you to buy Bitcoin also gives you the same seamless access to thousand of other currencies
* While there are still a lot of scams, the big established altcoins are now seen as safe
* There are currencies out now there that are far faster, cheaper to transact in, and still perfectly safe

Anybody convinced that Bitcoin can never ever go down in price because of the 21 million Bitcoin limit is missing the forest for the trees. The average consumer investor does not--and need not--limit themselves to Bitcoin, and technically-speaking, Bitcoin has no inherent advantage over its competitors, but alternatives have inherent advantages over Bitcoin (although most consumers aren't exposed to any differences between currencies in any case).

Yes, there is a sudden surge right now in Bitcoin's price, and massive new consumer investor adoption of digital currency apps: we're currently seeing a new load of millions of new investors get on board the digital currency market. But I would posit that these new consumers haven't yet learned what other consumers already have learned, but in time they will learn. In other words, they are simply in a different place on the learning curve.

But they are definitely going to learn, which portends a massive democratization of asset prices: the overall market cap of the market will be spread among thousands of instruments instead of just a few, since they are functionally interchangeable.

Focusing on the 21 million coin limit for Bitcoin is like saying your one acre of land is going to go up in price forever because your land's location is absolutely unique, which it is. But that's not how markets work, and it's not how supply and demand works. Scarcity only covers the "supply" side of the supply & demand equation.

Thoughts?