Topic: How to value bitcoin and cryptocurrencies? - page 2. (Read 409 times)

Makes perfect sense. Mining cost used to always work as the bottom line.
It can be broken with enough pressure, but only for a limited time.



I've always said that it's pointless to try to value bitcoin by looking at a daily exchange price, since the exchange volume is so small and people gamble (trade with leverage).
You either have to look at the average price like 200 MA, or at the mining cost.

.. Indeed, news and other concerns have a big impact on the bitcoin market. Because of its comparatively tiny market capitalization, Bitcoin is vulnerable to manipulation and can be volatile due to sensitivity to market sentiments. As you correctly point out, conducting in-depth study on trends is essential for anyone wishing to work in this field.

Its interesting to consider this claim—that the price is influenced by FUD (Fear, Uncertainty, and Doubt) or good news—critically and consider how these aspects manifest themselves. With Bitcoin, news may travel fast and significantly change how markets behave. Investors must not only keep up with current events, but also assess them critically in order to determine how they might affect the market.

Let us just be grateful that we have this new digital currency and we are enjoying the benefits of it.
There's no need to think about this value because you will only get crazy evaluating such worth.
For now, we are seeing how much it is being valued in the market by how much it is equivalent in dollars.

No one has derived any method for that, and no one has ever tried to seriously do it, at least to my knowledge. There are some very naive models, like thinking that Bitcoin's marketcap should be equal to the sum of all wealth, or all fiat currencies, but it's obviously useless.

It's just impossible to put a price tag on the properties that Bitcoin provides - being your own bank, censorship resistance, etc.

And currently Bitcoin is still in speculation phase where a lot of users just buy it to sell later, and this is the main drive behind supply and demand rather than Bitcoin's fundamentals.

I will also add a little that causes an increase in supply and demand which can have a big influence on price movements. News and issues are very sensitive to Bitcoin, these two things can change sentiment in the Bitcoin market. Because Bitcoin's market cap is still relatively small and relatively new, Bitcoin is very likely to be manipulated, so to get involved in Bitcoin you really need to do detailed research on trends and so on.
As the old saying goes, the price of Bitcoin depends on FUD or Good News.

The best way I know to value crypto currency or BTC is by investment. Somehow, one has to get involved in the activities and projects that make these cryptocurrencies work and be an ambassador for it.
There has never been a better way to value BTC that to HoDL, trade or pay rapt attention to crypto signals and whale movements to gain the best vantage position. Also, now that the price if BTC is high, one way to Value it is to simply speculate to the mentees the market situation and guide them possibly to make better trading decisions.

The market is volatile, which is one of the factors that are we should trade with prudence; any minor mistakes can result in a punitive fee, resulting in losses. Bitcoin is the independent valuable coin on the market; it is easily identifiable and frequently utilized in the system. Bitcoin can never lose value; it can only dump hard and liquidate trader accounts, but as the saying goes, what goes up must surely go down, and what goes down must surely go up. That is the exact movement of bitcoin in market charts, showing good concerns of bull and bear season.

Well, unlike traditional equities determining the value of bitcoin or any other crypto is quite more in-depth.

• Scarcity and Supply -> Bitcoin, for instance, has a capped supply of 21 million coins. The limited supply is a significant factor influencing its value.
• Adoption and Use Cases -> The more real-world applications and adoption a cryptocurrency has, the more valuable it is likely to become. Factors like how widely it's accepted as a means of payment or its use in smart contracts can affect its value.
• Technology and Development -> The development team's capabilities are critical. Updates, innovations, and scalability solutions can positively impact a cryptocurrency's value.
• Market Liquidity -> The ease with which a cryptocurrency can be bought or sold in the market affects its value. Higher liquidity can be an indicator of a healthier market.

That's as hot as my brain is for now , however there's more

Bitcoin raises its value because people are buying and there is an increasing demand while the supply remains. It is the same scenario that will happen to altcoins. As you can see many altcoins are dying because nobody is buying them and demand is declining. Well, we can say that people never value them as they are useless either. Bitcoin gain such appraise and continue growing because there is an increased number of users, investors, and traders due to its profit potential and usefulness, unlike these altcoins where most of them are useless and scam.

The demand and supply factors are another consideration when it comes to Bitcoin getting value. These factors are very much important because they play a vital role in the circulation of Bitcoin in the society. When there are much demand for Bitcoin and the supply is low it triggers the value of Bitcoin to plummet to a higher price than it was before. When the rate of adoption increases, the tendencies of price increase is established because there would definitely be a high demand for Bitcoin. So therefore, the value of Bitcoin is also dependent on the supply and demand factors.

Bitcoin value start from you down, base on the entry price you buy, that determine the value profits return, so Bitcoin has a potential value if you can hold for a long time investment.

you got a couple details the wrong way round

although mining has many costs depending on location, electric rating and such. these variables are not "value"
"value" is the baseline CHEAPEST/MOST EFFICIENT on the planet. its the bottom edge of a window
find the most expensive inefficient mining practice and thats the premium, the top edge of a window

the PRICE speculates inbetween the edges of the window.

..
price speculates in a volatile manner. because the window has reasons why someone in hawaii has different variables than someone slovic/asian areas. but the base line value is a bottom edge no one wants to cross because no one is making profit if they sell for less. its the ultimate supportline sellers wont go below

speculation is a buzzword to say random guess. where as prediction is meant as judgement after analysis
you trying to say market prediction and value speculation. which is the wrong way round

there is more actual numbers and data to analyse and calculate value(bottomline) so value is not speculative

value is an amount below the market. value rises at a more stable slower rise compared to the market volatility.

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wrong and wrong

the market PRICE is lead by supply and demand .. but the VALUE is not

the most efficient mining value has fixed details. like a 2 year lifecycle of mining hardware, contracted electric, and obviously a known blockreward amount. so value is not demand/supply driven. its cost vs reward driven

lets use dairy farmers and retail stores

the dairy farmer has a firm cost of production. the value.
the retailer can price milk at anything they like to customers depending on supply or demand.
if no one wants milk this week the retailer has to discount the price to get rid of it before the milk curdles
if there is high demand for milk but not enough production from the farm. then the retailers supply is low so they raise the price and do first come first serve basis, knowing people will pay extra

dont confuse market price with value.. dont compare wholesale with retail

and remember value is the underlying cheap side.. premium is the over the top expensive side
value is not the market price

..
though i occasionally look at market price chart wiggles. i do not get excited by the market price when i am not selling..
(if im not selling then the price is meaningless to me)
instead i value my bitcoin at the most efficient method to acquire bitcoin on the planet. as that supportline locks in my wealth/value to a point no one wants to sell below

I'll just say supply and demand. Apart from that I don't have any further idea. Maybe there's a little bit about adoption and marketcap. However, the most important thing when it comes to Bitcoin is supply and demand. It won't matter if the market cap is large but supply is greater than demand - Bitcoin prices will also be stable or even fall because there is not much demand here. In contrast, if supply is small but demand exceeds market demand, the market cap and price of Bitcoin will also increase rapidly.

You can't compare the value of shares, property, etc with value of Bitcoin which is a currency. They simply have nothing in common to be compared or use the same method to come up with the value of bitcoin.

But how do we measure value of bitcoin? I'd say it is very hard because it is decided based on supply and demand but demand is not something we can easily measure.

Some people keep suggesting to use "cost of mining" but what they forget is that bitcoin is not like something like gold that has a fixed cost of mining that is NOT affected by price of gold. Bitcoin cost of mining is affected by price of bitcoin. Which means if bitcoin is $1, the cost of mining it is just as low and if it is $1 million it will be just as high because the difficulty is adjusting based on hashrate which is increasing with the price.

I have some criteria for my consideration on value of a cryptocurrency

- Total supply. Too high means low price.
- Proof of Work. I don't choose Mintable tokens.
- Use case
- Utility

If a cryptocurrency does not have good use case, utility, it's hard for it to gain good value. No value, no good trading price on the market.
Without good use case and utility, demand on the cryptocurrency can not be high and can not be maintained at high with time. After a trend gone, its demand will drop a lot.
Less demand, lower price or worse the cryptocurrency will die.

And with Bitcoin, we know for a fact that the cost of mining a single Bitcoin will go up up up. This means the value rises, but as Frank mentioned, market price is not the value. This is why looking at a speculated value instead of the price is the preferred perspective of hodlers.

There are way too many unknowable variables to define the speculational value at some future or even present time. All we know that Bitcoin is designed to become more scarce and the demand for Bitcoin is still strong, after all these years.

That seems like a projection which sparks confidence.

The price of Bitcoin is likely influenced by the fundamental principles of supply and demand. While its fixed supply contributes to limited availability, when there's a surge in demand and people are holding onto their Bitcoin (often referred to as 'HODLing'), it can result in significant price volatility. These two factors, supply and demand, play a crucial role in determining Bitcoin's value.

I hope I was able to answer it right because honestly this question is quite tricky since crypto is different from the usual assets, so I guess we should focus on factors like utility and demand to determine it's real value.

As a guy that mines  I can tell you creating a coin is around 17-24k assuming just the power cost.

pretend you have a  s19xp it  pulls  80kwatts a day x 3 cents = $2.40 and mines 140 x 0.00000199 btc = 0.0002786 btc a day

lets round this to

$2.50 in power makes  0.000280 btc
$25.00 in power makes 0.00280 btc
$250.00 in power makes 0.0280 btc
$2500.00 in power makes 0.280 btc
$8928. in 3 cent power to make 1 btc.

but you need to add costs of labor.
the building housing the gear
and the gear.

My gear cost is paid for
my housing cost is paid for
my labor is my own.  If coins were to stay at 34000 after the ½ inning I would likely quit mining.

even with my cheap power deal.

marketcap is off by lengths.
Networkactivity should be the decisive factor.

Actually, I am of the view and opinion that a token or coin utility also contributes to the value and existence of the coin. When a coin or token is of good use in the market, the demand is always on the high side which causes an increase in the price value of that coin in the market thereby pushing up the use value of that coin. Value too has to do with acceptability. When  a crypto is acceptable in the market it means that there is every possibility that the crypto  would be in much demand in the market and that causes a sudden rise in price of that coin which shows the value of that coin.  For instance, Bitcoin is seen as a store of value so therefore people use it to measure their asset worth and in that case they store their wealth and asset in bitcoin which is quantifiable and  shows the asset equivalent in the number of bitcoin they have.