Apparently one of the arguments Keynesians make for why Bitcoin's fair value is close to zero goes like this:
MV=PQ
M is the total money supply
V is the velocity of money, that is the average frequency with which a unit of money is spent.
P is the price level of the money unit
Q is an index of purchases
The value of the Bitcoin economy = (PQ)/(V*21000000)
Since almost nobody transacts in BTC for goods and services, Q=~0 and thus Bitcoin's economic value is basically zero.
While it's true that almost no one transacts in BTC on a regular basis, the logic is flawed.
MV=PQ is the equation of exchange. It's a way of measuring the amount of money that an economy needs based upon the demand for transacting. It's Keynesian demand-side monetary theory as opposed to Austrian supply-side theory.
Here's the unstated assumption for why the equation is wrong. More accurately, I'd say the equation is INCOMPLETE. The whole thing is built upon the assumption that the ONLY factor for demand of money is to SPEND it. We all know that's absurd. As such, this equation can AT MOST only quantify demand for SPENDING value, not storing value.
The Keynesians can't comprehend the value of Fuck You savings.
