[bezalmighty]

In the macro economic sense, fiat money isn't 'used up' or 'locked away' when you buy something like crypto, it's transferred from your account to someone else's bank account. Worse, it goes through the process of fractional reserve banking and multiplies about ~10x after changing hands repeatedly.

[neilwilson]

There's no such thing as fractional reserve banking. It's an urban myth that has been debunked by QE for over a decade. Lord only knows why people still believe it.

Banks create money on demand by discounting collateral. Government creates money on demand by discounting the power to tax.

Fiat money disappears by the drain to taxation, to repaying loans and to 'rainy day funds'.

[RhodesianHunter]

This is easily verified as nonsense.

Fractional reserve banking absolutely exists.

QE is so thinly related I can hardly imagine how you could contort it to have "disproved" something which is codified in law and taught in basic finance and economics courses.

[baking]

Queen Elizabeth?

[Dylan16807]

Minus all the fees to the crypto miners, which end up wasting many hours of labor and causing pollution.

That money will eventually be used again but it's worse than paying someone to dig and fill a hole.

[KETpXDDzR]

That's correct. However, investing in Crypto using dollars will inflate the dollar. Thus, the arguments that the government will probably leave crypto alone, still holds.

[markus_zhang]

Not necessarily if the money goes to just a few person though.

[tim333]

But if someone with money to spend transfers it to a crypto scammers account rather than buying say a car, that avoids inflationary pressure on car prices.

[RC_ITR]

The trickiest question in business that noone seems to get right:

Q: How much money flows into "X" market? A: None, money flows THROUGH markets.

[klipt]

Although if you have X in circulation as money, and Y in stock market valuation, you could say Y/(X+Y) of total value is in the stock market.

If the market valuation goes up to Y+Z, you could say money has "entered" the stock market, pushing its share of value to (Y+Z)/(X+Y+Z) even though the money in circulation, X, could be unchanged.

[WA]

Not sure about that. Money velocity went down a lot. If you pay Apple money, Apple – the company – keeps that money as cash reserves in some form or another. This might be reinvested and circulates a bit more, but is it really spend in the real economy so that average Joe benefits from this?

[medvezhenok]

Yes, although you could argue that money that was transferred from a checking account to a brokerage account has « flowed into » a market, at least for the time it takes to settle any trades and for the counter party to withdraw theirs (since it will not be used for consumption)

[wexler88]

First sentence absolutely correct, second sentence absolute garbage.