Topic: Fair value is at 53.31$ ;-) (Read 1737 times)

This is the wrong way of calculating things. The chance that Bitcoin will succeed must be calculated from the market price, not the other way around (unless you have access to insider information).

No it's 666 because 333+333.

Not sure if you comment was directed at what I said, but yes... 25BTC per block, 6 blocks per hour, for 24 hours is 3600 BTC


Honestly, as much demand for Bitcoins there has been since the start of the year... I don't see the few coins being mined having much affect at all on the price. Considering only 3600 are made each day, which would get gobbled up in the exchanges in a matter of minutes.

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The only Bitcoins "made" every day are the ones generated through mining.  That is, 25BTC per blocks.

Bitcoins are not "sold", but "exchanged".  That is, both parties agree on a common price, and "trade" bitcoin for fiat/alternate cryptocoins/etc.

It is possible that one would want to control many bitcoins and not exchange them away.  In fact, a lot of people are hoarding their coins.  After all, why would you want to trade off your coins for fiat/goods if you know that by holding to your coins, in a few months, it may double it's monetary value.

The more people who hoard their coins, the less coins are in circulation.  That limit the supply, and raise the prices even more.  In a similar fashion, when mining difficulty raise, it's harder to generate coins, and thus, tend to raise the prices even more.  Same as when the reward was halved in last November.  Although it took a months or two to reflect on the prices.  Now, just wait until ASICs come out.  Let's see the prices when difficulty raise from 4.5M to 500~800M...  That is coming soon... So, whatever we think about what prices it may be next week, for sure in a months or two the prices may be much MUCH higher.  ACIS is coming.  Same as when GPU came along, the difficulty will raise.  There are no turning back once ASIC are here.  You may see a 100 timefold raise initially, followed by smoother (relatively) raise when most every miners will be ASIC.  Got to catch that front wave!

How about figuring the amount of new cash entering the bitcoin economy compared to newly minted bitcoins? Since the start of the year, the market cap has risen about $355 million. Divide that by 68 days, and we get an average of $5.2 million entering the bitcoin economy each day. Divide that by 3600 newly generated bitcoins each day, and you can assume that that amount of cash entering the economy can sustain a price of $1444/BTC.

Granted, at this time, a lot more than 3600 bitcoins are being sold each day. At the same time, not all miners sell everything they mine. Eventually, those with large amounts of bitcoins will drain their supplies and not be as willing to sell as many.

No, fair value is $173.70.


Assumptions:
-- Let's say there's a 25% chance that bitcoin is $1500 ten years from today, and a 75% chance that it's $0.
-- Let's assume a discount-rate of 8% annually (roughly historical stock market return).

So, the Present Value of $1500 ten years from now at 8% annual discount rate = $694.79

Expected Value = (0.25)($694.79) + (0.75)($0) = $173.70

https://bitcointalksearch.org/topic/m.1604325

see here: (click for larger image)


5.487 Million USD total on the bid side vs 102931 BTC on the ask side,
this is a ratio of 53.31 USD per BTC :-)