If you own a small amount of Bitcoin (say,$10) does one have to "invest" it somewhere for it's value to change or will the $10 fluctuate by just sitting in one's wallet and one can see the value fluctuate by checking the wallet from time to time?
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2I would suggest you do some reading: investopedia.com/university/forexmarket– user11221Commented Oct 15, 2014 at 1:18
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George I'm aware of trading but as I'm starting to learn about Bitcoin...it's different from cash money yet sort of the same...my thinking was one's $10 worth of Bitcoin could be worth more even if you didn't specifically invest it right??!....just wondering about those people who bought Bitcoin years ago & they forgot they had it...then now they find it's grown...but I presume it was just sitting in their Bitcoin wallet?– verveCommented Oct 15, 2014 at 1:40
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2 Answers
Whether it fluctuates or not depends on how you express value. If you happen to be one of them American folks, who use dollars to express value, then a fixed amount of money in other currencies (such as euros or bitcoins) will fluctuate.
But similarly, a $10 dollar bill will fluctuate in value, if you express value in euros or bitcoins (basically, that is if you live anywhere on the planet except the US).
It's all a matter of perspective.
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I don't know how to respond to this. Lol. Well, if the $10 turns to $11 in euros, gold bars, or whatever & you can use the $11 to buy something then it has in fact increased in value.– verveCommented Oct 15, 2014 at 0:44
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2It's more like, if I bought a $10 bill for €7 and I can now sell it for €8, then yes, it has increased in value - if'm spending euros. A $10 bill always stays worth 10 dollars of course, so I can't spend more in America. So it's still relative :) Commented Oct 15, 2014 at 6:06
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2@verve Think about what you could trade $10 for in 1950 (a steak dinner for 4, 12 gallons of milk, or 40 loaves of bread) versus what you could trade $10 for today. The $10 has definitely decreased in value. A bank won't lend you $10 today in exchange for you paying them back $10 next year because (among other reasons) $10 next year is worth less than $10 today. Commented Oct 17, 2014 at 16:12
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@DavidSchwartz I think I screwed up the question...I know that value does fluctuate or maybe I'm stupid but the money in my regular bank account with no interest etc. from 10 years ago is pretty much the same value...my question is when your bitcoins are in your wallet since they are virtual...if tomorrow $10 worth of coins are worth more...will the numbers within the wallet change to show it's increased value or will it just say .000051 or whatever $10 worth of Bitcoin is...yep, I'm dumb.– verveCommented Oct 17, 2014 at 16:26
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@verve It's just like anything else. If you have $10, and the value changes, you still have $10, it just has a different value. The same is true with Bitcoins. If you have 1 Bitcoin, and the value changes, you still have 1 Bitcoin, it just has a different value. Commented Oct 18, 2014 at 5:04
Bitcoin value is analogous to gold or foreign currencies. If you buy a gold bar with US dollars and wait a year, and if the value of gold increases during that time, then when you sell that gold bar, you will get more US dollars. The interesting thing about bitcoin is that is was discovered suddenly and the demand increased because of the internet, so the value increased faster than most other assets we are familiar with.
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And technically, it's anomalous why the demand exists at all. It (probably) contradicts Mises' Regression Theorem, yet here we are buying it for $400/btc.– TylerCommented Oct 15, 2014 at 5:45
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