Post
Topic
Board Economics
Re: The Bitcoin Price Paradox
by
dnprock
on 09/02/2021, 18:20:56 UTC
Bitcoin Price = Demand / Supply

Did you just make that up? Here is the correct formula: D(q) = S(q)

To find the price, you solve for q and then evaluate D(q) or S(q).

When supply reaches zero and demand is a positive number, Bitcoin’s price is infinite.

The price when the supply is 0 is D(0). D(0) is not necessarily infinity.

Let's say there's 0.1 bitcoin on exchange. Someone bids $1M for it. That's $10M / bitcoin. If supply continues to shrink, for example, to 0.01. That's $100M / bitcoin. Infinite price is possible.