I just heard the warren buffet quote saying that warren buffet wouldn't buy all of the bitcoin in the world for 25 dollars because he doesn't believe in it… But what if he did??
I would think that if he would buy all bitcoin for 25 dollars then the price of all bitcoin would tank because the price would be confirmed as 25 dollars divided by however many bitcoins exist.
Is that correct or would it depend on how many people would still value it after the sale?
What would happen if warren buffet would buy all bitcoin for 25 dollars?
byu/Matthijs2203 inAskEconomics
Posted by Matthijs2203
3 Comments
Basically yes, it would lose all value.
Change it from “buying all Bitcoin for $25” to something else like “buying all property in my county for $25”. Every house purchased for basically free still has value because it doesn’t matter if the original owner bought it for $25 dollars or $250k, the house can still be used as a house.
But Bitcoin doesn’t have an underlying value. It’s value is based on its utility as a currency (which is pretty bad, almost only useful for buying illegal goods and services) and its utility in the fact that you MIGHT be able to sell it for more than you bought it for to an even dumber invester.
If all Bitcoin was purchased for basically free, nobody would trust it to hold value long enough to try and flip it for profit. Look at the giant sea of people who just lost ALL of their money on Bitcoin because they got snatched up by Buffett for free?
If bitcoin has any value, it is that it can be used to buy goods and/or services. If it was all held by a single individual, it would no longer be useful as a medium for exchanging goods and services.
Doesn’t really matter how much he spent on it. It couldn’t operate as a currency if it isn’t at least minimally dispersed among the population of people who want and can afford things.
Well he can’t buy my bitcoin for $25! I won’t sell it, the only way it could possibly be taken from me would be under the threat of violence. So if someone comes in with a gun, and forces me to sell my bitcoin to warren buffet for $25, I’d be pissed. I don’t think I’d want my bitcoin back unless I got it for cheaper, but even then, if Warren Buffet has 100% of bitcoin, then I think it’s real value would more likely be $0, since the whole point of bitcoin is that it is distributed and exchanged, and if it’s not either of those things, who would even want any?