[EugeneG]

Stocks and crypto are fundamentally different.

Stocks give you a legal right to the assets and future profits of a company - a legal right enforced by the government (i.e. men with guns).

Crypto gives you no such right. In crypto you just hope someone else will pay more for it later. In that sense crypto is similar to baseball cards, and slightly similar to gold (gold has some industrial “actual” uses, but its high price is really driven by cultural perception of value.)

[suraci]

> Stocks give you a legal right to the assets and future profits of a company - a legal right enforced by the government (i.e. men with guns).

Financial derivatives such as options would be a better analogy, although I don't think anyone is currently buying stocks for the reason you mentioned.

Additionally, BTC and gold have fundamental differences, i talked abt it here and in other comments

[EugeneG]

Financial derivatives like a call option have a value derived from a stock (which is a real thing that gives real world legal claims on actual assets/profits). So it’s still not like a crypto coin.

People are most definitely buying stocks for the reason I mentioned. There’s a reason why the pension fund of the teachers of California, the pension fund of the teachers of Texas, and your 401k holds stocks. It’s not because they are collectibles with a lot of hype. It’s because they get a claim on future profits at (expected to be, on average, over the long run) a discount. Of course there are people who have no clue what they’re buying or why it works and just buy something… but that doesn’t mean the thing they’re buying doesn’t have a fundamental value connected to reality.

[blased]

Your argument for "crypto" applies to money. Money will lose 90% of its value over a century or so. In this case I don't have to "just hope someone else will pay more for it later" I know that money will be practically worthless if held.

[EugeneG]

I kind of agree. Money (e.g. the dollar) only has value because (1) we implicitly agreed as a society to have faith that it can be accepted by others for goods and services (2) the government requires us to pay a material part of our earnings as taxes which can only be paid using money.

If people lost faith, it would lose value.

Mild inflation (say 2-3pct a year) is considered generally good by economists. It’s an incentive to go and invest the money productively or spend that money on goods and services (which is good for growing the economy). Deflation in contrast would create an incentive to hoard money (just keep little papers with no productive value).