In finance, the greater fool theory suggests that one can sometimes make money through the purchase of overvalued assets — items with a purchase price drastically exceeding the intrinsic value — if those assets can later be resold at an even higher price.
In this context, one "fool" might pay for an overpriced asset, hoping that he can sell it to an even "greater fool" and make a profit. This only works as long as there are enough new "greater fools" willing to pay higher and higher prices for the asset. Eventually, investors can no longer deny that the price is out of touch with reality, at which point a sell-off can cause the price to drop significantly until it is closer to its fair value, which in some cases could be zero.
If you took offense to the 2k call you might just be that fool!
LevRidge
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@BitcoinMetrics, couldn't have said it any better... the denial of this is just like when I called for the bottom to fall out at 69k... the price of btc is only at these levels based on speculation of what it will be in the future... folks still don't understand this even though it's clear that is the case with these CRAZY price swings in such short periods of time... anything is possible at this point in BTC's life cycle.
no_method
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@BitcoinMetrics, nobody knows what the value of bitcoin can be pushed down to. That's what the market will tell us.
You can make money by selling an undervalued asset because there are plenty of fools who will sell it back to you at an even cheaper price. Don't be that fool!
In this context, one "fool" might pay for an overpriced asset, hoping that he can sell it to an even "greater fool" and make a profit. This only works as long as there are enough new "greater fools" willing to pay higher and higher prices for the asset. Eventually, investors can no longer deny that the price is out of touch with reality, at which point a sell-off can cause the price to drop significantly until it is closer to its fair value, which in some cases could be zero.
If you took offense to the 2k call you might just be that fool!