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43 sats \ 4 replies \ @Undisciplined 16 Oct \ on: Bitcoin Economics And Finance Survey bitcoin
Something that I think the author as well as the cited authors are missing, and it's making the writing confusing, is that the price of bitcoin should be treated like an exchange rate.
They're talking about the supply side dynamics of bitcoin exchange rates, but seem to be confusing themselves by saying bitcoin has a precisely known supply. By that logic, gold and silver have almost perfectly known supplies, because we know how much is in the Earth/Solar System/Universe.
The supply of bitcoin, as it pertains to the exchange rates, is what the current holders are willing to exchange it for. That's much more complicated, since many of us simply will not exchange our bitcoin for dollars, while others are just day-trading, and everything in between.
It would seem to render the analysis useless then, no? I wonder if there is a way to bring this to mainstream economist's attention. Maybe a co-authored paper from you and @SimpleStacker?
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I'm not a macro guy and I don't think he is either.
Edit: I'm not sure it renders the analysis useless, but it makes it unsurprising that they didn't identify any supply side drivers. They're thinking about bitcoin as something that is being produced for the sake of fiat profits.
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Yeah, not a macro guy either. I would like to write a paper on Bitcoin one day, but that may be a pipe dream given the amount of effort it takes to start a new research agenda.
As to the point on supply curves, I also wouldn't say it renders the paper useless, but it really depends on the papers' goals. Again, i'd have to take a deeper dive which I'm really looking forward to, just gotta find time.
Also, interesting tidbit, Coinbase's UI shows the depth chart of bitcoin, i.e. the current buy orders at each price level and the current sell orders at each price level. I use that to show a visualization of supply and demand in my intro to micro class.
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Coinbase's UI shows the depth chart of bitcoin, i.e. the current buy orders at each price level and the current sell orders at each price level.
No doubt that also has myriad problems, but at least it's the right concept.
Edit: It looks like this Brandvold paper uses exchange information from Mt. Gox to analyze price dynamics.
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