Confidence makes value. Value makes more value, which makes more confidence. Which makes more value.
But it’s not infinite. Think of a cartoon character who runs off a cliff and keeps running madly in place, able to stay there until someone points out that he’s dancing on air, at which point he plummets to the sharp rocks beneath him.
For so long as everyone believes in the value of a Svartalfheim sword, the sword will be valuable, and get more valuable. As the pool of people who might buy a Svartalheim sword grows – say, because they’re getting calls from their brokers offering to sell them elaborate, complex sword futures (a contract to buy a sword at a later date), or because their smart-ass nieces and nephews are talking them up – the likelihood that someone will say. 'Are you kidding me? This is a sword in a video game!' goes up ....
Confidence is great, but it isn’t everything. Reality catches up with everyone, eventually. All cartoon characters eventually plummet to the bottom of the canyon. And every sword is eventually worthless.