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But the supply hasn't increased. These bitcoins existed prior to the offer of sale. The only thing that increased was the free float.

by bcsmith 12y ago

ars 12y ago
That counts as supply. Silver in the earth also exists prior to sale, but it only counts when you actually sell it.
- bcsmith 12y ago
  By this logic, withdrawing money from the ATM increases money supply... Also, the expected amount of silver in the ground is factored into the current price of silver. It's really only when new deposits are discovered that there is an impact to the price. Actually pulling known silver deposits out of the ground has a negligible effect on the price.
  - hueving 12y ago
    This is completely false. If what you were saying were true, the price of oil would not change when the stability of the middle east was under question. Supply is the amount on the market, not the amount locked up somewhere that can't be brought to market immediately.
  - josu 12y ago
    >By this logic, withdrawing money from the ATM increases money supply It does. Although it has been critized, the quantitative theory of money [1] could perfectly explain the drop. [1]http://en.wikipedia.org/wiki/Quantity_theory_of_money http://en.wikipedia.org/wiki/Quantity_theory_of_money
  - baddox 12y ago
    If a bunch of people in a city decided to withdraw cash from all the ATMs one day, so that the amount of cash in ATMs got very low, don't you think the banks could increase the ATM fee and discover that people would be willing to pay the higher price? That example fits the logic perfectly.
  - Cthulhu_ 12y ago
    Except fiat economics are a bit more complicated than that. Everyone getting a 100% wage raise would increase money supply (and by extension massive inflation).
SolarNet 12y ago
The publicly available portion of something is the supply of a good. That would be like saying the supply of uranium in the universe hasn't increased, the only thing that increased was the free float of uranium (say due to new mining technologies, or the sale of previously restricted stocks).
drdeca 12y ago
The amount available for sale at a given price probably increased though. Which I think has a more significant effect on the market price than the total amount that exists.
deleted 12y ago
[deleted]
RockyMcNuts 12y ago
Supply is not a number, it's a function relating the price someone bids, to the quantity the bidder could buy at that price. For example, if 100 bitcoins that were previously unavailable at any price, become available for $600, then supply at $600 (and above) increases by 100. The supply curve shifts to the right. http://www.investopedia.com/university/economics/economics3.asp http://www.investopedia.com/university/economics/economics3....
- baddox 12y ago
  It is fairly common to use the phrase "the supply increased" to mean "the supply curve shifted to the right." It's an abuse of terminology in my opinion, but it's already extremely widespread.

But the supply hasn't increased. These bitcoins existed prior to the offer of sale. The only thing that increased was the free float.

by bcsmith 12y ago

But the supply hasn't increased. These bitcoins existed prior to the offer of sale. The only thing that increased was the free float.

ars 12y ago

That counts as supply. Silver in the earth also exists prior to sale, but it only counts when you actually sell it.

bcsmith 12y ago
By this logic, withdrawing money from the ATM increases money supply... Also, the expected amount of silver in the ground is factored into the current price of silver. It's really only when new deposits are discovered that there is an impact to the price. Actually pulling known silver deposits out of the ground has a negligible effect on the price.
- hueving 12y ago
  This is completely false. If what you were saying were true, the price of oil would not change when the stability of the middle east was under question. Supply is the amount on the market, not the amount locked up somewhere that can't be brought to market immediately.
- josu 12y ago
  >By this logic, withdrawing money from the ATM increases money supply It does. Although it has been critized, the quantitative theory of money [1] could perfectly explain the drop. [1]http://en.wikipedia.org/wiki/Quantity_theory_of_money http://en.wikipedia.org/wiki/Quantity_theory_of_money
- baddox 12y ago
  If a bunch of people in a city decided to withdraw cash from all the ATMs one day, so that the amount of cash in ATMs got very low, don't you think the banks could increase the ATM fee and discover that people would be willing to pay the higher price? That example fits the logic perfectly.
- Cthulhu_ 12y ago
  Except fiat economics are a bit more complicated than that. Everyone getting a 100% wage raise would increase money supply (and by extension massive inflation).

SolarNet 12y ago

The publicly available portion of something is the supply of a good. That would be like saying the supply of uranium in the universe hasn't increased, the only thing that increased was the free float of uranium (say due to new mining technologies, or the sale of previously restricted stocks).

drdeca 12y ago

The amount available for sale at a given price probably increased though. Which I think has a more significant effect on the market price than the total amount that exists.

deleted 12y ago

[deleted]

RockyMcNuts 12y ago

Supply is not a number, it's a function relating the price someone bids, to the quantity the bidder could buy at that price. For example, if 100 bitcoins that were previously unavailable at any price, become available for $600, then supply at $600 (and above) increases by 100. The supply curve shifts to the right. http://www.investopedia.com/university/economics/economics3.asp http://www.investopedia.com/university/economics/economics3....

baddox 12y ago
It is fairly common to use the phrase "the supply increased" to mean "the supply curve shifted to the right." It's an abuse of terminology in my opinion, but it's already extremely widespread.