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Why cryptocurrency markets defy the laws of economics
Speculative buying can drive cryptocurrency prices down. This is contrary to the usual laws of economics. Blockchain technology limits how quickly transactions can be settled. This constraint creates competition for priority between different users. The more speculative activity there is, the longer it takes to make a payment. But the future value of cryptocurrency depends on its usefulness as a means of payment. Speculation therefore affects price formation through a channel that does not exist for other asset classes. This can explain the high price volatility of cryptocurrencies, and is consistent with the low ... (full story)
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- Edited 9:06am Feb 20, 2020 8:49am | Edited 9:06am
- TudorIoan
- Joined Dec 2015 | Status: Member | 3437 Comments
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- Feb 20, 2020 11:49am Feb 20, 2020 11:49am
- Not-KPMG
- Joined Jun 2015 | Status: Member | 7592 Comments
Beware of robber banks (RB), bad advisors.
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- Feb 20, 2020 11:53am Feb 20, 2020 11:53am
- Not-KPMG
- Joined Jun 2015 | Status: Member | 7592 Comments
Beware of robber banks (RB), bad advisors.