Seems that number is based off all the coins possible..
Also seems like a nice trick to me. The bank come's out announces it, and give's BTC a top value not much higher than we are at already... Basically leaving people thinking "Cool but no real room left to grow so I'll go elsewhere!"
Nice play BOA, Nice play!
Topic: Bank of America covers Bitcoin - 1300$ fair price, potential for growth - page 2. (Read 7699 times)
December 05, 2013, 03:00:46 PM
December 05, 2013, 02:38:52 PM
Interesting. Very positive for BTC. But strange on several levels:
...
3. Where does this number of 1300$ come from? My guess: They totally pulled it out of their asses... when you look at number of people, money supply, total available gold, etc, etc, that number is MUCH higher...
...
3. Where does this number of 1300$ come from? My guess: They totally pulled it out of their asses... when you look at number of people, money supply, total available gold, etc, etc, that number is MUCH higher...
They get the number on the basis of:
* 5 Bn - assuming BTC gets a 10% share of global e-commerce
+
* 4.5 Bn - based on BTC becoming a major player in the remittance market
+
+ 5 Bn - based on BTC becoming a store of value roughly along the lines of silver
Total 14.5 Bn divided by the number of bitcoins gives about 1,300 per coin.
The figures are very conservative and as others have remarked, what they completely overlook is the protocol/programmability aspect of BTC.
Still, interesting and vaguely positive.
December 05, 2013, 02:07:22 PM
They clearly recognize the potential of Bitcoin as an upcoming ecommerce payment system or a store of value, and as a bank, of course they're interested in the potential, because people are going to need to convert money between Bitcoin/USD.
Hopefully their involvement also brings their lobbyists to keep strict regulation and laws away from the profits they'll be pulling in with BTC..they benefit we all benefit I'm guessing.
December 05, 2013, 01:53:55 PM
Some of you guys really crack me up. BOA is not "giving up the fight" or "accepting their fate". They clearly recognize the potential of Bitcoin as an upcoming ecommerce payment system or a store of value, and as a bank, of course they're interested in the potential, because people are going to need to convert money between Bitcoin/USD.
December 05, 2013, 01:15:58 PM
Here is the Bank of America report:
https://www.documentcloud.org/documents/885843-banks-research-report-on-bitcoin.html
I think it is a nice first effort. They fail to imagine second order effects. The use of cryptocurrency can alter the economy substantially, leading to more demand for transaction currency for example.
Transaction costs are the main reason behind vertical integration of the supply chain, take transaction costs away and the supply chain can disintegrate. Many more financial transactions just in getting a product to market, so more demand for transaction balances. Just an example.
https://www.documentcloud.org/documents/885843-banks-research-report-on-bitcoin.html
I think it is a nice first effort. They fail to imagine second order effects. The use of cryptocurrency can alter the economy substantially, leading to more demand for transaction currency for example.
Transaction costs are the main reason behind vertical integration of the supply chain, take transaction costs away and the supply chain can disintegrate. Many more financial transactions just in getting a product to market, so more demand for transaction balances. Just an example.
December 05, 2013, 10:50:39 AM
I don't see a link to the 14-page doc submitted. Just news about it. Does anyone have a direct link?
December 05, 2013, 10:08:52 AM
I wonder if them saying that $1300 per coin is a fair price is a hint that BOA holds some coins and they have decided they want to offload a portion of them when it hits that price and by saying that the price will get that high so they can start the dump.
It's not. Analysts from big banks just wanna play it safe to keep their job. They always put very conservative price targets.
They also tend to manipulate prices lower when they wanna buy or when they're short.
December 05, 2013, 10:00:25 AM
I wonder if them saying that $1300 per coin is a fair price is a hint that BOA holds some coins and they have decided they want to offload a portion of them when it hits that price and by saying that the price will get that high so they can start the dump.
December 05, 2013, 09:56:49 AM
Very good news, but for some reason it feels strange that this is coming from a bank.
It's not strange at all. Banks want to be part of disruptive sectors where there's huge exponential growth potential. This is where the money is made.
December 05, 2013, 09:55:13 AM
Very good news, but for some reason it feels strange that this is coming from a bank.
December 05, 2013, 09:55:03 AM
They won't go down that road because it takes big investments in infrastructure and it's not something their mindset allows them to do.
No special investments are required. People do it all the time in Alternative Currencies section with very limited resources. It doesn't take much to clone bitcoin code or even write something difefrent from it in some aspects. These alt-coins find a lot of supporters here on the forum, who start mining it, and if a big bank starts backing an alt-coin, it'll gather hundreds of miners in 24 hours. No special invesment is required here, bank's staff probably spends more on lunches each day.
Banks invest, they're not big on creating new systems. They will just pick a currency like Bitcoin or Litecoin and invest in either currency itself or the infrastructure.
December 05, 2013, 09:51:46 AM
I think from the beginning they have been buying huge chunks of coin. And come to think of that they have neat powerful main frames to do massive computing power. They could have invested earlier.
December 05, 2013, 09:50:55 AM
Why they are doing this is simple. It is now more profitable to launch bitcoin banking services than to limit bitcoin's expansion. You and I know that we don't need a bank with bitcoin. But the next wave of users will not understand the technology and may very well be wooed into BoA online wallets and exchanges. The profits will be sick!
December 05, 2013, 09:49:06 AM
They won't go down that road because it takes big investments in infrastructure and it's not something their mindset allows them to do.
No special investments are required. People do it all the time in Alternative Currencies section with very limited resources. It doesn't take much to clone bitcoin code or even write something difefrent from it in some aspects. These alt-coins find a lot of supporters here on the forum, who start mining it, and if a big bank starts backing an alt-coin, it'll gather hundreds of miners in 24 hours. No special invesment is required here, bank's staff probably spends more on lunches each day.
December 05, 2013, 09:44:34 AM
Game on now. After this you can fully expect each big bank to develop their own crypto, maybe smaller banks will do too.
You mean BOACoin?
December 05, 2013, 09:44:13 AM
Game on now. After this you can fully expect each big bank to develop their own crypto, maybe smaller banks will do too.
They won't go down that road because it takes big investments in infrastructure and it's not something their mindset allows them to do.
More banks will start coverage of Bitcoin. Expect Morgan Stanley, Goldman, Paribas, Societe Generale, Deutsche Bank to follow suit. This in turn will bring even more money into Bitcoin itself and the bitcoin infrastructure.
December 05, 2013, 09:37:18 AM
Game on now. After this you can fully expect each big bank to develop their own crypto, maybe smaller banks will do too.
December 05, 2013, 09:35:07 AM
Other analysts see a bit higher prices (but I guess they invested in BTC themselves):
http://www.coindesk.com/bitcoin-price-reach-98500-say-wall-street-analysts/
http://www.coindesk.com/bitcoin-price-reach-98500-say-wall-street-analysts/
Analysts from big banks just want to play it safe and don't risk more extreme price targets. Keeping their job, by playing it safe is more important than getting it right. If 1000 people say same thing and they're wrong about it, it's very easy to save face. If only one makes such statement and he's wrong about it, his job may be at risk because it's much harder to save face. Most analysts are aware of this and act accordingly.
December 05, 2013, 09:31:54 AM
Other analysts see a bit higher prices (but I guess they invested in BTC themselves):
http://www.coindesk.com/bitcoin-price-reach-98500-say-wall-street-analysts/
http://www.coindesk.com/bitcoin-price-reach-98500-say-wall-street-analysts/
December 05, 2013, 09:31:28 AM
They clearly don't understand bitcoin is far more than a currency/store of value/financial instrument, it is a protocol that will revolutionise dozens of industries. It's like the next layer of the Internet. This is a massive undervaluation.
There's coloured coins which is being developed which will allow for a completely secure decentralised stock exchange and that will be a brilliant way to equity crowd-fund any project, ranging from a blog, an art project to a business or social venture.
Then there's a ton of other things, this video gives a few really good ideas of what it could be used for but I've seen all sorts of other things too: http://www.reddit.com/r/Bitcoin/comments/1rsm4r/stefan_molyneux_explains_why_bitcoin_may_be_the/
There's coloured coins which is being developed which will allow for a completely secure decentralised stock exchange and that will be a brilliant way to equity crowd-fund any project, ranging from a blog, an art project to a business or social venture.
Then there's a ton of other things, this video gives a few really good ideas of what it could be used for but I've seen all sorts of other things too: http://www.reddit.com/r/Bitcoin/comments/1rsm4r/stefan_molyneux_explains_why_bitcoin_may_be_the/
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