Regarding market capitalization- it's very dangerous to underestimate the power of financial reflexivity. Soros of course is a huge fan, but it's almost impossible to avoid. Take btc for example. It's useful because of its high marketcap and liquidity. Now of course refexivity is a two way process, but when you look at the outcomes for our biggest public companies today, if you did the type of underwhelming analysis you just applied to Tesla to Amazon a decade ago, you'd be shocked to see Amazon where it is today. Amazon still doesn't turn a profit on its e-commerce business.
Access to capital in the hands of skilled operators results in unexpected business growth.
The e-commerce business does not generate a profit, but it does generate a cash flow that paid for the development of a capability that could be used for new, more profitable things. But this other business was not something they could have built from scratch had they not had the e-commerce business, because it was that which generated to wherewithal to produce the latter.
You say btc is useful because of its high market cap and liquidity. Useful for what. If you use it to finance something else, don’t you have to sell some of the btc? But if selling btc is something that is done to any degree the price would fall, and if that affects the technical analysis of the chart, then btc becomes valueless. So can you really use it to any degree?
Regarding market capitalization- it's very dangerous to underestimate the power of financial reflexivity. Soros of course is a huge fan, but it's almost impossible to avoid. Take btc for example. It's useful because of its high marketcap and liquidity. Now of course refexivity is a two way process, but when you look at the outcomes for our biggest public companies today, if you did the type of underwhelming analysis you just applied to Tesla to Amazon a decade ago, you'd be shocked to see Amazon where it is today. Amazon still doesn't turn a profit on its e-commerce business.
Access to capital in the hands of skilled operators results in unexpected business growth.
The e-commerce business does not generate a profit, but it does generate a cash flow that paid for the development of a capability that could be used for new, more profitable things. But this other business was not something they could have built from scratch had they not had the e-commerce business, because it was that which generated to wherewithal to produce the latter.
You say btc is useful because of its high market cap and liquidity. Useful for what. If you use it to finance something else, don’t you have to sell some of the btc? But if selling btc is something that is done to any degree the price would fall, and if that affects the technical analysis of the chart, then btc becomes valueless. So can you really use it to any degree?
a good explanation also of self-fulfilling paranoia
I don't follow. Can you expand?