> As the Bitcoin price reaches ever higher, many prospective investors become wary of the higher price, making it more difficult for entry-level investors to join the market.
I am quite surprised a seemingly crypto-centric news site doesn't know you can buy fractions of a coin.
Or maybe I misunderstood what this sentence meant.
I think it means that it looks more and more like a bubble, so people are less and less willing to buy in the more expensive it gets. It's not about the total amount risked, it's about the total amount of risk.
Think of it like when you want to buy a company's stock. If the price has recently increased by a lot, many people avoid it because they think it is overpriced. They don't want to risk buying it at this price. It has nothing to do with being able to buy fractions of a coin.
Because people that already hold bitcoin will still be willing to buy. If you bought bitcoin at $1000 you might still be willing to buy at $8k as that would still price your avg bitcoin price at $4500 and won't be making a loss until bitcoin drops below $4500. Entry level doesnt mean your wealth but you being a first time buyer or entering into the bitcoin market at current prices. Which means when the price goes down you are going to make a loss.
Regardless of whether or not this is the intended meaning of the author... I've been following various cryptocurrencies very closely for a while now, and this type of thinking is surprisingly common. It's crazy the number of times I've seen someone argue the total supply of coins is a limiting factor, or that one currency is more successful than another one because the price is higher. I try my best to correct misinformation, but it goes to show how inexperienced some investors in these markets really are.
So the inflated price is in lieu for the risks someone is taking to withdraw from the exchange.
At $50 a day, it will take more than 8 months to even cash out a single bitcoin. By the time someone realises the mistake, the price might have jumped to 15k USD.
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[ 4.6 ms ] story [ 91.6 ms ] threadI am quite surprised a seemingly crypto-centric news site doesn't know you can buy fractions of a coin.
Or maybe I misunderstood what this sentence meant.
https://en.wikipedia.org/wiki/Sunk_cost
1. This exchange is highly illiquid, and has extremely low trading volumes.
2. Other cryptocurrencies are similarly inflated on the exchange.
3. Cash withdrawals are only allowed from the exchange to Zimbabwean banks. These accounts cannot easily be held by non-citizens.
3. Due to a cash crisis, Zimbabwean banks currently have strict USD withdrawal limits of around $50 / day.
But mainly because of something called counter party risk. The caveats of selling a bitcoin on Golix exchange has been stated here: https://news.ycombinator.com/item?id=15627972
So the inflated price is in lieu for the risks someone is taking to withdraw from the exchange.
At $50 a day, it will take more than 8 months to even cash out a single bitcoin. By the time someone realises the mistake, the price might have jumped to 15k USD.
Deflation of the primary currency is not a good thing for economy either.