Is that a fact? Entities that have invested in bitcoin (Fortress, Overstock, DigitalBTC, Tim Draper, The Bitcoin Foundation) seem to have regretted it, and did not want to repeat the experience. They could have bought shares of BIT from SecondMarket, but they didn't. They could have bought raw bitcoins (brokers would be happy to assemble large lots for them), but they didn't. (Risk is not a concern for large investors, they can hire expertise and guard their coins as safely as COIN would do.)
Wall Street obviously does not see bitcoin as being worth more than 220 $/BTC right now...
Is that a fact?
What are you basing this assumed regret from? (seemed to have regretted it)
Fortress Investment Group (manages 58 billion $ portfolio): bought 20 M$ in bitcoins in late 2013, reported paper loss of 3.7 M$ on that investment in early 2014, invested some money on Pantera's fund management comany. I can't find any mention of bitcoin by them after that.
Overstock: They were the first big store to accept bitcoin through BitPay. At first they opted to some percentage of their sales in real bitcoins, but then they stopped doing that, they now get 100% dollars. At the end of 2014 they held only 340,000 $ worth of bitcoins (~1500 BTC), versus 180 M $ in cash and 10 M $ in precious metals(!). Sales paid in bitcoins dropped after the first months, and amounted to only 3 M $ in 2014 (out of ~ 1.5 billion $ in total sales), all domestic.
DigitalBTC: An australian bitcoin mining and trading company now trying to switch to bitcoin software products. For the 2nd semester of 2014 they reported 1.2 M$ sales of software, 8.7 M$ revenue from bitcoin trading, 4.6 M$ from mining -- but "Net Loss After Tax of $2.3 million due primarily to non-cash accounting adjustments to the fair value of bitcoin inventory and performance rights and depreciation"
Tim Draper: bought 30'000 BTC at the first USMS auction (~650 $/BTC), 2000 at the second one (~350 $/BTC), did not bid for the third.
The Bitcoin Foundation: nearly broke, had to let go most of its staff; due in part to them keeping their funds in bitcoin.
Wait a minute... do you deduce their supposed regret from the fact they did not immediately buy all of the rest of the supply of coins available? hmmmmm.... so how come a single entity has not bought up all of the gold in the world? or the oil? ..........on a separate note do you suppose that "wall street" does not see oil being worth more than its current very low valuation ? that is odd, because wall street thought it was worth almost double this price only last year.. has oil become half as useful, or half as sought after? has it really lost half of its "value" , is there a replacement synthetic on the market to replace the fossil fuel? or could it be that something else is having an effect on price?
I don't understand your point. Yes, Wall Street does not see oil as being worth more than 60 $/barrel right now. So?
"Something else" in relation to what? How do you propose to measure the value of oil or bitcoin, except by watching how much people are wlling to bid and ask for it?
Just because you are a gold dealer/investor, it does not mean you buy ALL of the available gold.... not a hard concept to get your head around, and it is no different with BTC, if you have bought tens of millions worth,and that is what you decide to buy, not buying more does not mean anything concrete at all. Literally nothing, you assume it is regret but you could easily be wrong, it could be a multitude of reasons, you just like the regret theory.
The "something else" in the case of oil, is that the Saudis have flooded the market with cheap supply, on purpose, and so there is an increase in supply, but it is not an "organic" increase in supply, or the result of a new set of reserves, it is because the Saudis are flooding the market for political reasons, and wall street is just along for the ride, they are not the ones setting the price of oil, they are not controlling the supply, they are merely doing what they do..... the fact that oil is almost half the price of its ath, is nothing to do with oil being less in demand, and it is nothing to do with it being less useful, it is nothing to do with the fact that oil is suddenly not as useful and it has nothing to do with the properties of oil and what it can (or cannot) do, or what its true "value" is, in reality, the true "value" of oil is not worth half of what it was last year, and it is not "half as useful".... the reason for the change in price is the result of political manoeuvrings and manipulation on the part of the Saudis. Hence there are "other" considerations in play other than "what wall street thinks it is worth"
The idea that you define how much something is worth by how much people bid and ask for it, is not entirely correct, as the Saudi example shows, and is evident in other forms of business, there are situations where the price does not reflect the true value of an item, easy example, say Walmart decides that they want to run a promotion to get new business, they sell a product that the rest of the market says is worth £10, but walmart sell it for £5, for a period of time, maybe to get more customers, or maybe to hammer a nail into a competitor, or what about a company that discounts item A, and sells at a loss, but they do so, so they can sell more of item B at a considerable markup.
There are many possible reasons, why something may sell for a price that is not what one would decide is the true value of the item.
The market does play a role in deciding price, as does supply and demand, but then so does various forms of manipulation by market participants ,for many tactical reasons.
Prices can be suppressed, and/or prices can be inflated depending on circumstances, and objectives.
(ps, also random walk)
