ELi5:On What a Basis Do Crypto And Share Market Go Up And Down
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Best I can figure, there’s two things that drive share price.
The first is the value of the company; it’s revenues, costs, risks, innovations, etc, etc. That is generally pretty stable day to day.
The second is emotion. And emotion can spin on a dime. Like when someone impersonating Eli Lilly & Co tweeted out “Insulin is free now”, Lilly’s stock price took an immediate hit. Nothing about the company had changed, but people panicked and that caused the price drop overnight.
My problem with crypto is that there’s no fundamental value behind it. None of them have established themselves as a widely used form of currency, it’s still pretty niche. So it’s value is driven almost exclusively by investor speculation. And investors are human. And humans are emotional creatures.
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