Topic: What is Bitcoin's fair value? - page 4. (Read 1723 times)

Good post OP.

There are many similarities drawn between bitcion and gold. Are there parallels which can be drawn between methods utilized to calculate the fair value of gold (precious metals) and the fair value of crypto currencies due to both not being applicable to the typical Price/Earnings(P/E) model which many equities investors favor as a method of calculating valuation?

Here's another potential method for calculating a fair value for btc.

#1 Size estimate of current btc userbase : Current btc price.
#2 Expected size of future btc userbase : (Projected future btc price via proportion)

If the size of bitcoin's population doubles roughly every 12 months, that rate of growth could be relatively stable similar to how moore's law guidelines the number of transistors able to fit on a die double approximately every 24 months.

Not to imply that the price of btc should double annually. Some of the growth we're experiencing now could be due to btc being undervalued for a long time relative to the growth of its userbase.

We really can't say or identify a fair value for the coin because it doesn't have any thing to promise in return right now. also it is hard to set a fair value because it doesn't reached the maximum price that it can have. We don't even know if what is the future of the coin if it will really replace the fiat system, if this happens then a fair value can be set for it.

Trying to find bitcoin fair value is just another form to speculate with the price, the truth is the most simple of the rules that took economist centuries to discover is the only true way to find the price of bitcoin and that happens every day, supply and demand, the price of bitcoin has been going up for months and it is simple to understand that the demand for bitcoin has increased due to many reasons like the forks and the recent upgrade in the network.

That's the million dollar question right there, that no one knows how to give an exact answer. It's impossible to define a value for bitcoin, and that's why we have so many divergent opinions about it. Some say it's a bubble, because they see no value in it, others say that anything bellow $100k is cheap, because of it's potencial. Bitcoin value will always be defined by supply/demand model just like anything else. Right now, we all see the potencial of bitcoin, both as an asset or as a currency, and we all expect mass adoption some day, and that gives a lot of perceived value to the coin. If bitcoin does not fail technologically, and is not struggled by regulation, then it will most likely achieve it's goals and it's price will be huge because it's scarce. So yes, bitcoin right now has a perceived value based on hope

The fair value of Bitcoin is what others are willing to pay for it. Right now people are willing to pay about $7000 for a Bitcoin, so that is what it is truly worth. Bitcoin and most other cryptocurrencies are valued by the free market because no government or business owns them (except for possible institutional investments). To me this means that the price is accurate most of the time. The exceptions would be when a whale pumps the price and then dumps the coin or some other manipulation of the price.

We can't really determine BTC fair value coz its value depend upon what buyer want to pay for it. Due to limited supply and increasing demand BTC value seems to be increasing day by day. There is no set rules and regulations that can fix price cap on it so every price is fair for BTC.

OP does not asked that. But if we see bitcoin not only as currency but as commodity too, then why not think the market cap?

That is no wonder why bitcoin is having so much price at the movement. According to your speculation or the article read bitcoins monetary base value is dependent on the terminal value which is also the same thing as competing with market cap value.


It will keep growing in the same way as the traditional assets do and will depend on the same things. It only differs with the decentralisation nature which different thing. That has some percentage of effect on deciding price of bitcoin because it gives freedom of investing into bitcoin.

Its true that bitcoin does not have any intrinsic value since it is not backed by gold or any other asset.
But in other words,it could be even said that it is invaluable since no one could fix a maximum price limit for it.
Some even compare it with tulip.But tulips were traded in just contracts without even holding them which made its trade to collapse.But,bitcoin is verified.

We recently saw that even china,the once dominant ruler in bitcoin world could not have an impact on bitcoin's price and progress.So,bitcoin's price could not be affected by such factors.

Bitcoin's price could not be calculated based on its mining cost.If it has to be calculated this way,then what would be the fair value of gold today?Its fair value would be very less and its today's price is also a speculated price based on the increase in demand for it.

The basis of determining true value without going much deeper in Economics is by taking average of prices worldwide.
As Bitcoin has negligible real value (not zero because of some degree of utility), the only basis of determining value is what buyers wanna pay for it. The demand may differ worldwide due to different outlook and circumstances in different countries. So it is always better to average prices of different nations.

I don't know how we can't to call current and almost every price fair? I say this because as we all know price depends on how we sell it, so we people determine it and I think it's the most fair way to determine price. I think currently there is no better method to make price fair, it can always be considered unfair because of very rich people. Well, have you any better idea?

It all depends on what value is already placed on it. The biggest factor will always be demand as long as people want bitcoin the price will reflect that.

Where did you get those numbers? I mean they're pretty specific and I'd like to know which source you used.

I think that the current price is very much driven by speculation, it might be because of the next fork, we've also seen a steady increase in value with the previous forks.
Definitely expecting a rather big correction soon, but I could be very wrong on this.

According to the information I read, the fair value of bitcoin is $ 2300.
But we all know, the bitcoin exchange rate is very high due to:
First, calculate the change in the cost of mining equipment and its performance.
Furthermore, production difficulties, factorization in the cost of electricity faced by miners on the network. The number of bitcoin is limited while the user (demand) bitcoin very much, so the price becomes expensive. Even today (02-11-2017) had reached USD 7000.54 for one Bitcoin.

It is a digital currency and hence there is no cost for producing it. Most people who are against Bitcoin say the it's value is zero because it has no real value. But I disagree with them since the cost of an asset can be put forward on demand and supply. Bitcoin runs on demand and supply and so the market is the actual value of Bitcoin according to me which by the way keeps moving upwards.

I think the topic want to compare the valuable of bitcoin and gold per unit not the marketcap.

I can totaly agree, there is no right or wrong bitcoin price or something about it that is fair or unfair. It's determined by the market, the demand and supply ratio whether we like it or not. The highest price people are willing to pay for it it's the true value of bitcoin and there is no forumula designed to make accurate prediction or exact value in any peiod of time. But we count on that bitcoin will be more valuable as the time goes by.

if it were to be equal to gold then it must 111 trillion dollars market cap.

For me Bitcoins has no real fair value because it is always subject to change of course when the supply and demand of it are the main issues, we all know that Bitcoin will only have a fix 21 million coins so it means that the supply of it is limited overtime and the demand is almost never ending if it will really boom in the next years of its existence. No one can really tell to what is the fair price of a single Bitcoin though.

Thank you.

1. Yeah, since Bitcoins are highly volatile it's not a reliable medium of exchange and because of that a good number of merchants who accept Bitcoin do instantly convert it to Fiat. Recently Overstock decided to keep 50% of all its Bitcoin payments as investments and the reason is quite simple, so far Bitcoin has proved to be a good store of value. So basically different perspectives, merchants who consider Bitcoin as too volatile and who consider it a long-term store of value. Bitcoin isn't going to attain stability overnight, but we will have more merchants who rather than converting to Fiat would retain Bitcoin and gradually more adoption would lead to price stability.

2. Store of value and medium of exchange. Right now there aren't many options available to spend Bitcoin. If you bought one Bitcoin @ $2000 and large scale merchant adoption happens when Bitcoin is around $10000. Wouldn't you be using it as a medium of exchange? Purchasing power, I would.

Bitcoin was primarily created as a peer-to-peer payment system, but it is more of a speculative asset now. There is high reservation demand/store of value, but the existing transactional demand is too low and that also being speculative transactions. But if you look at recession-hit nations like Venezuela and Zimbabwe, Bitcoin is used as a primary medium of exchange.

Bitcoin as an asset or currency, we don't know how it's going to evolve, but one thing is certain, the long-term potential, stability of Bitcoin depends on its usage as a censorship-resistant medium of exchange.

http://bitcoinppi.com