Hacker News Reader

Comment by fr0sty | Hacker News Reader

It isn't right. It would only be true if every miner was immediately liquidating the bitcoins they were awarded. Such a massive oversupply would likely overwhelm demand and push the price much lower.

In reality this is not what BTC miners are doing (from what I can see). They are mining and hording BTC for later use meaning that the mined coins require $0 to enter the system to maintain equilibrium.

View on HN

That doesn't mean the math is wrong. What he's saying is each day the total value of bitcoins is going up by that amount because # of bitcoins * current price. He's also saying that it doesn't make sense, he sees irrationality in the behavior. If more bitcoins are added than value created, prices should go down, but aren't, they are stable. Something seems to be out of whack, the market isn't behaving rationally. Essentially bitcoins are becoming more overvalued as more get unlocked because supply is increasing faster than demand but the exchanges aren't reflecting that (yet).

This is just the market cap effect. You can't buy or sell a company for its market cap; usually the real price is much higher or lower. Likewise just because you can buy or sell 1 BTC for $15 does not mean that 6.7M BTC are really worth $103M.

With a market cap there is still a finite number of shares, there aren't new ones being constantly created. We're also talking about a commodity, not shares of a company which is a value creating entity.

Reply on news.ycombinator.com