Bitcoin: Where Does All Devenu riche bitcoin stock Money Go? SummaryA look at how Bitcoin has grown, and what happens to all the daily volume. Is Bitcoin ‘An Exponentially Expanding Global Financial And Economic Black Hole? Why Bitcoin is making powerful enemies on Wall Street.
Each week it seems the crypto-currency mania is getting ever more maniacal. And the higher it goes, the louder the debate gets. It’s like an amplified version of the old stock market debate, with cautious old timers warning of a correction, and speculators riding the wave of euphoria. 3 trillion, which is no longer a sum of money that is globally insignificant. I think Zoltan is on the right track.
Bitcoin’s growth will worry Wall Street, and perhaps even governments, just not in the way described in the article. Where does all the money go? 50k on Bitcoin rather than home renovations. That money has been sucked out of the economy, he argues. And with inflows increasing exponentially, Bitcoin is acting like a ‘Financial And Economic Black Hole’. But where does all the money go?
Well, the majority of Bitcoin transactions are like any other financial transaction. A buyer and seller agree on a price and a trade is executed over an exchange. 50k in the form of a cash deposit. That seller may now keep it in the bank, buy other cryptos or withdraw it and spend it in any way they choose. If they decided to re-invest in cryptos, the trade process is more or less the same and the new seller has the same decisions to make.
Eventually, somewhere down the line, the seller decides to withdraw the money and it comes back out in the form of cash. 50k did not necessarily drive the price of Bitcoin higher. Prices do not always depend on volume. Let’s say over the weekend China reversed its regulation of exchanges and Jamie Dimon surprisingly claimed Bitcoin was a serious investment.