2025-12-27 12:23:11

Recently, a friend asked me a question. At first glance, it seems simple, but it actually reveals a fundamental misunderstanding many people have about crypto assets. He said: "Since BTC itself doesn't generate cash flow, pay dividends, or pay interest, why can its price keep rising?"

This is a typical example of applying "stock thinking" to "currency assets"—and it's completely wrong.

Let's first correct a cognitive bias. Because we're used to valuing companies and bonds based on "cash flow," many people assume everything should generate cash flow. But have you ever thought about it: does money itself generate cash flow? Cash in hand doesn't generate it, nor does gold, but why have they maintained value for thousands of years? The answer is simple—because they serve as a tool for pricing other "cash flow-generating" assets. The pricing layer doesn't need to produce returns itself; its value lies in acting as a "measure of value."

What has happened over the past decade? The Federal Reserve's balance sheet has expanded from less than $1 trillion before 2008 to several trillions today. This isn't a temporary move; it's a structural overhaul of the entire financial system—the base of the monetary foundation has been permanently elevated. From another perspective, the total global liquidity today is much more abundant than at any point in history.

So here's the question: in this context, who is engaging in "risk-free arbitrage"? Imagine an economy with 100 people earning income through labor and trading with each other. Now, suddenly, there's a "special entity"—it doesn't need to work at all and can create new money out of thin air. What would happen? This entity can use the newly created money to buy others' assets and labor outputs, effectively "free harvesting."

BTC0,62%

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CantAffordPancake

· 7h ago

Damn, finally someone explained this thoroughly. My friend keeps asking me about this, it's so annoying. Speaking of which, the Federal Reserve's move is really ruthless, printing money until no one dares to make a sound. People in the crypto world should take a look at this, instead of blindly buying worthless coins. The logic is actually very simple. Why do so many people just can't understand it? I just want to ask, how do you know that cash flow necessarily generates value? The part eaten up by inflation is ultimately taken away by someone else. Bitcoin is like digital gold. Anyway, I believe in it.

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AirdropHunterXM

· 12-27 15:26

It's truly absurd to evaluate Bitcoin using the same methods as stocks. Honestly, why does the Federal Reserve's printing money have value, but BTC doesn't? Humans have been using precious metals for accounting for thousands of years. This recent maneuver by the Federal Reserve indeed provides a reasonable reason for the existence of cryptocurrencies. We all see the devaluation of the US dollar. Remember when some friends argued with me about this topic before? Now you should understand. If there's no cash flow, it should die? What about gold? It hasn't paid dividends in thousands of years. The key is liquidity, everyone. It's not that complicated. As the printing presses keep running, our assets have to move, that's the real truth. Your analogy is excellent—one relies on labor, the other on printing money, and in the end, it's the same. The system itself is flawed. People still obsessing over cash flow just haven't grasped the point.

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BlindBoxVictim

· 12-27 12:49

Wake up, you're still asking why BTC is rising? The Federal Reserve has already printed the answer for you. This cash flow approach doesn't really apply to currency at all; some people just can't understand it. After a good sleep, another trillions of dollars are printed, and this is the truth about inflation. Stock market thinking is deeply harmful; most of the reasons why newcomers in the crypto world get scammed are because of this. To put it simply, the pricing layer has never made money itself; it's just a weight. Can printing money out of thin air buy assets? This is a trick that financial institutions have been playing for hundreds of years, and now you finally understand, right? Once you get this logic, you'll understand where the rationality of holding coins lies... Wait, does this mean that the central bank is the biggest risk-free arbitrageur?

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ContractTearjerker

· 12-27 12:48

Manipulating liquidity is always a winning game. Really, once the printing press starts, no one can resist. Stock market thinking applied to BTC, this mindset should have been broken long ago. What the Federal Reserve has been doing these ten years is a blatant wealth transfer. Creating money out of thin air to harvest, how else do you expect this game to be played? Money itself is a pricing tool, don't expect it to lay eggs on its own. Gold has had no interest for thousands of years, so why should BTC have any? What are you thinking? Once you understand the rules of the liquidity game, you'll realize what kind of money you're actually earning. Risk-free arbitrage? That's not a thing; it's just a matter of being informed or uninformed. Inflated to tens of trillions, with such a foundation, sooner or later it will need a place to support it.

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SneakyFlashloan

· 12-27 12:46

I love this logic, finally someone has explained it thoroughly. When the money printing machine starts, it completely reverses the game rules, no wonder holding coins is necessary. Hey, your analogy is excellent, the example of 100 people instantly exposes all the hypocrisy. The cash flow theory is fundamentally wrong, why should pricing layers necessarily generate money? Hmm, it seems that those who got cut earlier didn't understand this. So ultimately, it's a liquidity game—who gets on the bus first wins. The Federal Reserve has indeed changed the entire playing field over the past ten years, making it more challenging. This is perfect for countering those who ask "Why is BTC worth anything?"

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ImpermanentLossFan

· 12-27 12:43

Haha, finally someone explains this thoroughly. The stock mindset really does more harm than good. Printing money is the real risk-free arbitrage, workers are being cut again and again. The trillions of dollars from the Federal Reserve have long flowed into the asset side, no wonder Bitcoin has to rise. Always asking if BTC produces cash flow, but the question is wrong. This perspective is brilliant; pricing shouldn't inherently generate returns. In an era of liquidity floods, holding fiat currency is actually negative interest, better to hold coins. Why can the central bank create money out of thin air? I should just obediently deposit in the bank, hilarious. The definition of the value scale has changed; old thinking frameworks simply can't contain new things. The example of 100 people is perfect, directly exposing the essence of this system.

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GamefiEscapeArtist

· 12-27 12:40

Enlightenment at last, someone finally pierced through this layer of window paper. People in the crypto circle have long understood that the traditional financial valuation framework doesn't apply to digital assets. Speaking of which, the printing press runs 24 hours a day, yet retail investors are still worried about BTC having no cash flow—what a gap... There are many things with no returns, so why is this one always being criticized? Risk-free arbitrage is never ours.

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SleepyArbCat

· 12-27 12:25

Wake up, wake up... Your logic has some points. The Federal Reserve's printing press is indeed "harvesting," but what about the BTC in our hands...

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