I don't particularly like the question because it's sort of irrelevant.
When I say "sort of irrelevant," I don't mean that individual opinion doesn't matter, but this is an auction market in which trading occurs across vastly different mediums. In this thread we've already seen personal valuations at ~200% current market rate, but this means nothing. The posters don't even believe in their personal valuations because nobody's partaking in the 50% off sale going on all day every day. There's money up for grabs at half-off and nobody's buying.
I just don't think it's the best interpretation to visualize the market as requiring some Universal price anchor or pricing mechanism, but rather value will be determined by localized factors as it has been. For example, certain factors make valuation on Bitstamp different from BTC-e, and certain factors also affect valuation of BTC traded on the chain vs. off the chain. The price of BTC on BTC-e is always lower because it's simply near impossible to directly fund your account with fiat. The price on Local Bitcoins is simply misleading because the spreads are ridiculous and the depth isn't there. The prices asserted in this thread are, at best, hearsay because nobody is trading at these prices.
When I say "sort of irrelevant," I don't mean that individual opinion doesn't matter, but this is an auction market in which trading occurs across vastly different mediums. In this thread we've already seen personal valuations at ~200% current market rate, but this means nothing. The posters don't even believe in their personal valuations because nobody's partaking in the 50% off sale going on all day every day. There's money up for grabs at half-off and nobody's buying.
I just don't think it's the best interpretation to visualize the market as requiring some Universal price anchor or pricing mechanism, but rather value will be determined by localized factors as it has been. For example, certain factors make valuation on Bitstamp different from BTC-e, and certain factors also affect valuation of BTC traded on the chain vs. off the chain. The price of BTC on BTC-e is always lower because it's simply near impossible to directly fund your account with fiat. The price on Local Bitcoins is simply misleading because the spreads are ridiculous and the depth isn't there. The prices asserted in this thread are, at best, hearsay because nobody is trading at these prices.
I also don't love the question, but for a slightly different reason. Markets are forward-looking, so basing a price on today's value doesn't really tell the story.
My valuation model for BTC involves looking at it as a percentage of M2 money supply. I know what I believe it will be worth in or around 2020 (probably less than many forumites think at around $2300-$2500) and I am buying now because, even at that price, a 6x return in less than 6 years is amazing.
But it's worth noting that, as with stock purchases, future earnings are "baked" into the price quite a bit. I'm not buying now because I believe the intrinsic value (based on M2) is all that high, but rather because I'm buying the equivalent to future earnings. Based on M2 calculations, I'd suspect the snapshot value TODAY using the model is more likely in the range of $20-50.
The other thing to remember is that price and value are different. Over time they converge, but there can be many divergences to the high side and to the low side. It's quite possible that if adoption is strong and use-cases are strong that the value in 2020 will be $2300, but foward-looking markets will set the price much higher. Or lower.
- and the market price is what ?
