2 economists just eviscerated bitcoin, saying it should be trading at $20 - page 3.

stompix

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Blackjack.fun

Quote from: bbc.reporter on February 01, 2018, 07:46:25 PM

Read the full article http://www.businessinsider.com/2-economists-just-eviscerated-bitcoin-saying-it-should-be-trading-at-20-2018-2

An "economist" opinion means nowadays zero, or 0.000001 if he has a twitter account. We all know what happened in 2007 and how economists were able to estimate s***. And the ones that did manage to get things right screwed up 20 times after.

Lets's start:

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The supply of bitcoin increases only slowly towards its famous fixed limit and is now around 15m.

If you're an economist and you play with numbers like that then...you're not an economist, it's 16.8 you moron.

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The use of bitcoin as a means of payment is currently around $100m per month, or $1,200m a year.

Where the hell did he get those numbers from?
https://blockchain.info/charts/estimated-transaction-volume

And at this point...arguing about it useless.
But let's do the math with his own method but real numbers.

Since the value of transactions is 2 billion a day (based on the same damn newspaper the guys write for link

We would have to increase the price once 20 times and again 30 times.
Leading to a value of ...surprise 12 000$

PS.
bbc.reporter I'm sure you understand I'm not arguing with you but with Mister Richard Jackoff

UnDerDoG81

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Bitcoin is death threads coming up, good sign.

bbc.reporter

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@gentlemand. But they did not discount speculation. It is the precise reason why they are under the impression that bitcoin is still trading up above its true fundamental value of, according to their calculations, $20.

This is their reasoning.

The supply of bitcoin increases only slowly towards its famous fixed limit and is now around 15m. The use of bitcoin as a means of payment is currently around $100m per month, or $1,200m a year. Were bitcoin just like ordinary money each bitcoin would be used around four times a year in making transactions. So we have 60m bitcoin payments supporting $1,200m worth of bitcoin transactions, which requires that each bitcoin is worth $20.

They also said that for bitcoin to give grounds on its present value, utilization must increase by 1000 fold.

gentlemand

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Welt Am Draht

Quote from: bbc.reporter on February 01, 2018, 08:41:45 PM

@alyssa85. They are economists, and for that reason they always look for an investments' fundamental value. I reckon something like bitcoin is defying what they have studied about their whole lives. Also if bitcoin proves them wrong, they now would have to question their PHDs and their beliefs.

But I do agree that what took bitcoin to $20,000 was speculative mania.

How can a professional economist discount speculation? That's a cornerstone of all economies. This was definitely mania but if someone I was employing came out with statements of such stunning naivety I'd fire their arses off.

bbc.reporter

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@alyssa85. They are economists, and for that reason they always look for an investments' fundamental value. I reckon something like bitcoin is defying what they have studied about their whole lives. Also if bitcoin proves them wrong, they now would have to question their PHDs and their beliefs.

But I do agree that what took bitcoin to $20,000 was speculative mania.

gentlemand

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Welt Am Draht

If they're paid economists who write stuff like this... this is sub kindergarten shit.

What about gold minus speculation? That's probably around $20-$50 of actual usage too. What about Tesla? What about almost everything else on this Earth at present?

If they can magically excise speculation from Bitcoin then go right ahead. I'll look forward to Bitcoin NoSpeculationOrYou'reCanned.

alyssa85

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CryptoTalk.Org - Get Paid for every Post!

It hasn't been $20 for at least 7 years.

I think they're just trying to score headlines with their "shock" prediction. The fact is, bitcoin's worth is what people are willing to pay for it. And there are plenty of folk that think it's a store of value that will protect them from the vagaries of the normal economy and investments. And that includes a bunch of well-heeled hedge fund guys...

bbc.reporter

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Is it time to realize that bitcoin's high price principally came from speculative sources and not real world utilization? I know I will get a lot of negative replies by saying it, but a simple look at the market shows that it is true. With the speculatory mania gone, what does the bitcoin market really have?

Richard Jackman, an economist at the London School of Economics, and Savvas Savouri, an economist at Toscafund Asset Management, however, estimate the coin is still trading far higher than it should.

That number, according to Jackman and Savouri, is a mere $20. Here's their logic:

The supply of bitcoin increases only slowly towards its famous fixed limit and is now around 15m. The use of bitcoin as a means of payment is currently around $100m per month, or $1,200m a year. Were bitcoin just like ordinary money each bitcoin would be used around four times a year in making transactions. So we have 60m bitcoin payments supporting $1,200m worth of bitcoin transactions, which requires that each bitcoin is worth $20.

There's always a "but" with such analysis. And the "but" in this case is that bitcoin could be worth its current value, but it would have to see a 1000-fold increase in its use as a form of payment.

Read the full article http://www.businessinsider.com/2-economists-just-eviscerated-bitcoin-saying-it-should-be-trading-at-20-2018-2

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