I'm going to explain how market valuations work, how pricing works and is determined, and I'm going to do it by telling you a story about Billy, $7 bills and Autism. My apologies for autism insensitivity.

Billy is a fucking retard that grew up with no friends. Sure Chad and Fuckface (unfortunate name) grew up on his street, but they never took Billy seriously, mostly because he was always eating glue.

These kids grew up and Chad married his high school sweetheart and became major of shitville. Fuckface, despite his shitty parents was a pretty smart kid and ended up getting 8 PHDs and a great job on Wall street.

One day, Billy got bored of tanking on his meat and went for a walk in the woods where he found a door under some leaves. He went inside and found a factory and a bunch of spooky skeletons. The factory made $7 bills, and there was 10 million of them.

Billy got pretty happy about this and went around trying to buy some fidget spinners in town but nobody would accept them as legal tender. Billy was sad. His bills were worth zero.

One day his toilet clogged because he tried flushing his $7 bills in frustration so he called Derek the plumber. Derek offered Billy $1 per bill, but only had $1000 to spend. Billy gladly accepted. Derek unclogged his toilet for him.

Billy didn't know it (he's fucking retarded after all) but his $7 bills marketcap was now $10M, even though only $1000 was spent. It had risen to this because Billy had found a buyer willing to pay $1 per bill, thus that is the value of his cache.

Billy, being a retard, thought his bills were still useless but Derek kept coming over once a week offering to buy some bills for $1 each. Eventually word spread around town and he had many people knocking on his door.

Oddly enough, even though now $10000 had been spent, when he checked CMC he noticed that his bills marketcap was still only $10M.

He thought this was strange so he decided he would stop giving away his $7 bills for $1. The total amount of money he made so far was $1000, or rather $900 because he still owed Chad $100 for the $5 loan he took out back in 1982 to buy his green turtle pool that Billy still bathed in.

Or at least that's what he believed. In fact his paper portfolio was very likely "worth" much MUCH more ($7 bills and all. However since Derek was the only seller, and since Billy was gladly accepting $1 each, and since Billy represented 100% of all sellers, his erroneous perceived value of $1 actually made the $7 bill worth $1 in reality, regardless of what number is printed on the face of it. You see, if I haven't mentioned this already, he's a fucking retard.

Now the citizens of Shitville, being not much smarter than Billy, decide that he must also be right about the value of this $7 bill (being worth only $1, because seriously, who makes a $7 bill anyways?). So the town has generally agreed that these $7 bills should be worth $1 each and stores even start accepting them as barter.

As time goes by, Fuckface returns home from the big city. He hears about this new bill and investigates. It turns out these are the real deal, and even have official serial codes n shit. He still doesn't think anyone outside shitville is stupid enough to buy a $7 though. Nonetheless word spreads around town that Fuckface thinks these are real. People start offering $2 a bill, then 3, then $4, etc.

You see this is how the value of an asset is determined. Something is only worth what the general consensus believes it is worth.

Time goes by and price has risen above $7 to $10. These have some cool art on the after all and they have become a status symbol. Sure it says $7 on it, but when Billy takes it to Fred the grocer, Fred let's him take home $10 worth of pornmags so who cares?

Chad gets wind of this and calls Fuckface up. Fuckface starts seeing people in the big city start carrying these $7 bills around as a fad. Fuckface and Chad are no dummies though, but they kind of want a part of the pie. It turns out these have value more than the $7 printed on them because they are rare as fuck and are collectables.

Chad and Fuckface, after being sad that they missed the boat, come up with an ingenious plan.

The next day at the council meeting, Chad announces that the factory condition these were printed in was dangerous. Anyone holding the $7 bills were very likely to catch autism.

As news of this meeting (and that super smart and handsome Fuckface backing it), all autistics in shitville who are unable to think for themselves believe these bills cause autism. All of a sudden what was once a 100M market cap bill crashes to $20M, $2 per bill, literally instantly.

It could have crashed to zero, but you see many people in town, being already fully autistic, are unafraid. Every single autistic person now controlled all these coins. Except for two others, you guessed it, Fuckface and Chad, who gobbled up as many as they could.

The market cap is now $20M.

A day later, one autistic sells a coin to another autistic (one single coin) for $1. The market cap is now $10M.

Now $1M did not exit the system. Only $1 did.

You see, once the General consensus was that people should no longer trade a $10 bill for this new $7 bill, and even worst it was only worth $1 coin, the "value" immediately fell to that point. This happened the very second one of the autistics were able to get their hand on one single bill for $1. The seller determined he would meet the sale price, and since nobody else was willing to buy it for $2, the entirety of every single bill is now worth $1 each until people decide otherwise.

It remained at this value for a long time, as nobody was brave enough to get autism, not even Chad and Fuckface, because they just took a 50% hit and were afraid only autistics would buy their coin, and only for $1 now.

Billy, after starting with 10 million $7 bills no longer has any $7 bills. Despite being fully autistic, he was afraid to keep any $7 bills because of double autism reasons.

Regardless, Chad and Fuckface assess their situation and realize they are surrounded by idiots and that they are the only people that know that $7 are truly legit.

fuckface, who is greatly respected, makes a press announcement that he has conducted research, and his 53 PHDs conclude that the $7 is both totally legit and free of any autistic pathogens such as trace vaccinations.

Long term, the $7 bill returns to its full value, and even a bit higher due to its rarity. You see, Fuckface fell down the stairs carrying his bags and died on impact. His entire stash was auctioned off and people paid extra for this collectable, because he scribbled a minuscule dickbutt in the corner of every bill and signed, "Bamboozled – Fuckface".

TLDR – don't let Fuckface convince you that your $7 bill is worth $1, because the moment you do, that very second, IT IS. Even if little to no money actually left the fucking system.

You. fucking. Autistics.

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