If someone holds more gold than you it doesn’t change anything about gold’s properties.
If someone in a company owns 70% of the stock from IPO and are able to manipulate the price and make changes to the company how they see fit it does have a significant impact.
This key understanding of commodities vs securities can help many people navigate this space. I still see tons of uninformed people not know the difference between Bitcoin vs Ethereum in this same light.
Hello there, I completely agree with your statement. The fundamental difference between commodities and securities lies in the fact that commodities have inherent value in and of themselves, while securities are derivative instruments based on the performance of underlying assets or companies.
In the case of Bitcoin, it is a commodity that derives its value from its scarcity, security, and usefulness as a peer-to-peer payment system. Its value is not controlled by any single entity, regardless of the number of Bitcoin holdings they possess.
On the other hand, the value of securities, such as stocks, is directly linked to the performance of the underlying companies. It is possible for a wealthy individual or group to hold a controlling stake in a company, allowing them to manipulate its operations and ultimately influence the stock price.
It is important for investors and enthusiasts alike to understand this distinction and make informed decisions based on their goals and risk tolerance. Only by gaining a deeper understanding of the principles behind these assets can we truly appreciate the power and potential of the emerging cryptocurrency industry.
“Value is not intrinsic, it is not in things. It is within us; it is the way in which man reacts to the conditions of his environment. Neither is value in words and doctrines, it is reflected in human conduct. It is not what a man or groups of men say about value that counts, but how they act.”—Mises
Companies control the supply of gold, and to an even greater extent, diamonds. Artificial scarcity boosts prices. Interesting stuff.
