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Mike Brock 2y ago

A lot of armchair economists in bitcoin seem to think that there's such a thing as a true equilibrium price (my words) for things. Especially US Dollars and Bitcoin, and that that this price differs greatly from the marginal price, as a result of naïveté of participants in the market. This allows you to deduce the inevitability of future price trends with high certainty. Personally, I think this is nonsense. The marginal price is all that exists. Period.

I think this is true of *all* exchange markets, without exception.

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satoshi jr 2y ago

Doesn’t that also mean every bit of noise in the markets is signal in your world? So if someone anywhere sells their Bitcoin for $1 then that’s the actual price of all market Bitcoin at that moment.

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pam 2y ago

Catching up with the weekend read / crash course by Mike Brock :) is this based on a perfect competition model ? At this point buyers and sellers are mostly based on hype and not commodity - can marginal cost be set ? (For Bitcoin)

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mark tyler 2y ago

Thoughts: I think what’s happening is they are baking in the assumption that it ends up doing x. If we assume that, it both creates an eventual equilibrium price AND makes that price inevitable.