Topic: What is Bitcoin's fair value? (Read 1750 times)

Bitcoins does not have the fair value because those investors are earning a huge amount of profit from the market's volatility and because of that we can expect to become very wealthy if we are patient enough to wait until the price grow up before selling.

There have been several factors affecting bitcoin price, including supply demand, government regulations and laws, technological changes.
There are associated factors along with the major factors that overall affect the price of Bitcoin. On one hand where major factors would cause occasional price changes, associated factors with the major ones would cause the price change without being obvious and gets unnoticed also sometimes. So it becomes a little tricky to calculate a fair price for Bitcoin.

Blockchain has value as a technology. But Bitcoin has no value, and is certainly not money, which is proven by the volatility of its (entirely subjective) valuation. The essence of money is to store present value for future transactions.

Of course, the price which is derived from the demand and supply is the actual price of Bitcoin but when it comes to the value, I would consider acquisition cost and other aspects related to it. For a miner, the fair value for Bitcoin is the cost which he spent in the mining operations, he will definitely expect some profit on the acquisition cost and that would be the market price of Bitcoin from his end. When it comes to the fair value, I would take the average of top bid/ask prices from the market (I don't want to cut the rewards of the sellers here).

I think the value or bitcoin price is fair enough and appropriate. After all, there are many people who spend their money to invest bitcoin and many people are interested and want bitcoin that causes the price and bitcoin value to be high and continue to increase.

I agree that we can hardly talk about such a concept as "Bitcoin's fair value". The value of bitcoin is completely dependent on people's interest in it. In this regard, bitcoin is very similar to gold, the price of which also depends entirely on the demand for this precious metal. Therefore, the price of bitcoin always corresponds to the extent to which it is of interest to members of the crypto-currency community and investors.

I think bitcoin's fair value is debateable. Some expert said bitcoin should be $250k and John Mcaffee said bitcoin should be $1millions on 2020. Maybe the fair value is on market by see on buying and sell transaction.
Honestly I hope bitcoin can be like analys said that bitcoin can reach $25k end this year because if bitcoin price rising, other coin will going up too

I think the market value of bitcoin is increasing day by day and there are lot of good brands are accepting bitcoin and that is why bitcoin is looking the top first demand of the public and its demand is increasing day by day,

I don't think that the bitcoin has a fair value because it is really depending on the demand of the people in the market. The value of bitcoin is always fair because the price is being dictated by the demand and there is nothing that we can do with that thing. The value of bitcoin will not become fair if there is manipulator in the market only but right now, the market seems good and well maintained.

I think relevant to this question is this topic here:
When will central banks in the world, as an aggregate, stop increasing the supply of fiat-currency/credit in the world?
https://bitcointalksearch.org/topic/when-will-supply-of-fiat-currencycredits-in-the-world-stop-being-pumped-2434870

Probably yes when everything is exhausted and no more transactions to trade. But as of this time, that is to far from reality. All the released value of bitcoin as for the moment is fair. It only matters on the current transactions made by the new investors and the downstream trading that are working for the value of bitcoin

What about its security? What about its open immutable ledger for everyone to see & check? What about its decntralization around the globe? What about its fair(er) distribution? Above, you meant that its scarce in supply when you say "small" right?

bitcoin prices are very expensive because they are very small and hard to find while very high demand, this becomes the main trigger of bitcoin price increase.

What about 10 more years in the future?

When will central banks in the world, as an aggregate, stop increasing the supply of fiat-currency/credit in the world?

It is hard to identify bitcoin's fair value right now since people sees it as an asset and thinks that price will go high in the future most people are willing to pay more than it's current price for future investment. Unlike other currencies that has gold to determine it's fair value bitcoin don't have any purely supply and demand.

That is entirely subjective since different people value the same thing differently, as was the case for bitcoin. I mean, if people are willing to pay $7700 for a single, digital coin that has no intrinsic value, there would also be people willing to pay more than that as long as they get their money back plus profit in the long run. That is how they value their bitcoins, and not really much on how they can use it but how can they benefit more from the potential profit it brings.

No one could actually judge any sort of fair value for the bitcoins. This is because the rate of single coin entirely depends upon the concept of demand and supply difference.

If the people make it demanding currency due to excessive use and if the total number of shares I the open market are more in terms f cryptos, the  obviously the price would get higher. So the fair value of the coins is just what is declared by the consumers through usage and investment.

Yes the fair value of the bitcoin is very hard to predict because it keep on changing as the value of the bitcoin is high today then tomorrow the price of the bitcoin will be more than this and then with the time the price and the value of the bitcoin remain changing as the people are aware of the value change and they never say that the bitcoin will ever get down in the price and the value almost all the people are buying the bitcoin and investing in it so the price will be high in the future.

I do not understand what the concept of a fair price. The price is formed by demand and no one may make against the will of the buy bitcoins. If today you pay $ 6,000 and tomorrow pay $ 5000 then this is a fair price. Bitcoin breaks all stereotypes and the issue price is only one of these parameters.

None can fix a fair value for bitcoin, because when the price was around $1000 people find that to be a fair value. When the growth happened in a large scale and reached above $2500, people started to indicate this to be the fair value. So, with bitcoin nothing cam be fixed as a fair value.

Yes, the value of bitcoin can't be stable because it is a digital currency and ups and downs occur in it's price in daily routine. If someone want to invest his money in bitcoin then he/she should invest his money immediately rather than wasting any more time because the price of bitcoin is increasing day by day. Moreover its price will be variable forever, it depends on its demand and importance.

I also do not agree with the Turner’s comment. Bitcoin is basically not the legal currency and hence it is a very important factor to control the prices so as to match the people’s choice of right and wrong.

The basic factor behind its consistent use is just the control of price and nothing else decentralization simply means that the currency is not supported by the GDP of any nation and hence it requires index eats to rise or fall within a limited level. This helps to maintain the consumer rate and investment market .

Yes, the value of bitcoin can't be fixed because it is a digital currency. It's price is variable and ups and downs occur in the price of bitcoin in each and every second. If we look to the average point of view than the price of bitcoin is increasing day by day and if you want to invest, then you shouldn't waste your time anymore because it's price is increasing day by day.

You may not understand the op's question. He or she mean about the more real usage into the bitcoin will give them more support to the bitcoin price and it will not drop easily just at this time. But not sure about that seems a lot of company already trying to determine the bitcoin as big market speculators.

what do you mean bro? Expand the price?  ? Maybe you  are talking about bitcoin value? Yes according to my knowledge bitcoin will fall if theres a cheao demand of supply but when there's a plenty of supply there a possibility bitcoin surge.  I am right?

There is nothing in this world with which we can determine the fair value of bitcoin. It is because of the reason that the only thing which determines the market price of bitcoin is the demand of bitcoin in the international market.

With the increase in demand, the market price of bitcoin also increases. There is no hard and fast rule which can help us in knowing this thing that this is the faro amount.

Gold is now in the history bitcoin and this coin has surpass all the beneficial investment and now its price is totally depending on the user trend as demand gets high price become high and as demands gets low price remain stable or start to go down and all this is the story of btc and this coin has ability to click back and now its price is at 7,5k and that’s the best price to achieve and still there is a lot of room to increase.

That is just the point. If there is no one willing to pay $7000+ for it, then we will just keep hanging at a particular price and if there is no real demand for it, then people would be willing to give it out at a lower value.

As long as there would keep being demand for it as long as we get to a point that it becomes useful then the value is perfect at that moment and that is the worth! In short, there cannot be any fixed value for bitcoins as it is purely people's preferences to afford any price levels to buy and to use.

Says the BlackRock strategist who'll definitely say "yes, that's the right price" to anyone who would offer him Bitcoin at say $6,500 right now. Fair value should be a very basic concept for him to grasp. Bitcoin will cost Zimbabweans more than $10,000 right now if bought locally, but there's a lot of considerations priced into that: scarcity against demand being the most obvious, but also the risk that the seller takes (that Bitcoins will be even in more demand and that local currencies are likely to bend even more in a stale economy).

When China's exchanges faced closure, similarly the extra risks for owning Bitcoin were priced in, and fair value there was 10% below global market average.

Like you said, that's the simple test - will people accept the price? If yes, then that's the right price. Simple, isn't it?

I think with coming years if BTC usage in reality not expands the price of BTC can drop more and more by the time.

Am I wrong?

We know that bitcoin price are easily influenced by many things, for the moments I think the price at $7000 can be said to be a fair value right now, in the more people are getting closer on bitcoin, a lot of people more interested on investing in bitcoin, and the more of countries that has been legalize bitcoin as a currency. Of course all that's things can be affecting on bitcoin price was so high at right now and I still believe the price still can leads to moving higher again.

Yes, once the buyer is ready to pay what you are willing to give it out for, then I do not see anything unfair in that value. That simply means it is very much needed and same value is hard to come by from something else. We the users are in control and if we feel we want to give it out lower than what the market is giving it, then it is our choice. As long as the demand is needed most especially more than the supply, then it is a very fair value.

When will central banks in the world, as an aggregate, stop increasing the supply of fiat-currency/credit in the world?

That'll be the answer.

What will work for other asssets won't work for Bitcoin. It has been debated on more often now as Bitcoin's proce is above 7000$ and many people now are curious if Bitcoin is now overpriced. The problem is thatwe don't know how to compute Bitcoin's fair value even the Big Investors cannot throw a number onto it. The Buyer's confidence is getting weaker and weaker everytime Bitcoin's price goes up higher.

Correct the only fair value is the one people are willing to to pay for a bitcoin if at some point that value reaches 100,000 dollars or 1 dollar that is irrelevant that is what people are going to be willing to pay for it, so the current price is correct but as we know what can be considered a fair value changes everyday and that is fine, people are not used to a currency to move in this way but bitcoin is a new type of currency so it is natural that displays a different behavior as well.

  maybe bitcoin is one of the biggest company in all countries it has a great investment platform and excellent compensation. Bitcoin is a new currency that was created in 2009 and of course it has been bitcoin ,but it does not change anything else they increase value or became equal to all of them.
This is still important and still is a currency value .there is not equal to or bitcoin with one bit at all and the bitcoin is one of the money passed to all the banks and large stores it is used a way to be sure if you want bitcoin to money change....

The fair value of bitcoin is only when he will become a tool for economic development. When no matter how much you have coins you can't control the market. Many people do not believe in Fiat but economic laws are hard to break. The state used Fiat for their own purposes and this led to the fact that we have wild inflation. Bitcoin is now rising in price and no one is interested in the reasons for this. We can become a victim of such growth. Everything should have a purpose.

I love how the posts was based on facts and backed up by some website and knowledge about it.
I think this is the perfect definition that would make newbies understand it. There is not much of deep words and just clearly said.
I am not perfect with my English but yet I did honestly understand all of it.
Scarcity is the true answer. Anything that is getting depleted will have to be more valuable specially people are backing it up.

Yes, the decentralization alone is a value and the fact that people end up knowing that the government cannot just be busy controlling their way of spending and enslaving them is what would make bitcoin to keep increasing in value.

The value of bitcoin at any point is fair since there is demand for it and without utility or great value, the demand would not have been high. So, even if it is tagged at $1 million, it is still a fair value as long as people need it, just the law of nature.

We could not determine any particular value as fair value of bitcoin.Just as gold price increases or decreases with change in demand,same would be with bitcoin.Its price is affected either positively or negatively by the market factors.Japan legalized bitcoin and thousands of retailers started accepting bitcoin payment triggering its price.China's ban on ICOs made bitcoin price to fall a little temporarily.Bitcoin's potential is that it deserves more price than what it is today.

Bitcoin's fair value is whatever the market says it is. It depends on various factors such as the market cap, how many Bitcoins are in existence, etc. One of the most important value factors of BTC is its retail usefulness, that is how many online stores actually accept it as a method of payment for their products/services, and also in-person.

So long as anyone buys it in it's current price it is it's fair value since there is no way to determine the real fair value of bitcoin. If it dumps, that is the sign that the price as of the moment has been to high. If it pumps, then all that means is that bitcoin's fair value increased. If there is a way to determine it logically, then it would be easier to tell which price is it's fair value but for now let us just say that the current price is it's fair value.

There is no reasonable way to price Bitcoin. It all depends how many uses will be found for it and whether some other digital money will become more popular. But the price will probably get more stable once the market capitalization is getting bigger.Bitcoins value is only based on people speculation.

It has a fair value currently there hasn't been any downfall lately and it is only rising as long as the price of bitcoin is rising i surely think it is a fair price but when it starts getting dumped thats the moment i feel it should increase

You have tackled some good points on that post. But the biggest problem is, in cryptocurrency there is no such accurate data gathering not like most stock investments. We can’t even account the bitcoin that Nakamoto have or if it being sold. The fair value can be calculated upon the demand + the availability of such item but bitcoin even have the exact 21+ million supply but to know where and if it was not lost is a different scenario.

It is really difficult to put a fair value for bitcoin,there were many analyst who claimed that the price would touch $10000 in ten years time,and the basis of this assumption is that there would be more investments during this time and hence the price would increase,what happens if the rate of investment increases rapidly as we see today,the price just blooms ,since it is limited in number it is hard to set a fixed price,the more people are investing in it ,more the price will be.

If anyone has heard of Norton antivirus founded by Peter Norton. Here's an interesting quote he made in the early days of IT security.


It is possible that a lot of things said about bitcoin are similar to what people said in the early days of computer viruses when many thought they were a hoax or myth & refused to believe they existed until hard evidence became distributed years later. Crypto is a new and emerging technology. People try to place expectations upon it based on what they know about existing technologies like the stock market but overall it may be futile.

Offhand I can think of examples where stocks exhibited 300 times growth. After the economic crisis of 2008 there were bank stocks priced @ $0.01 which rose as high as $3.00 after the bailout bill was announced, 300 times increase in value. These types of massive price increases have been known to happen under special circumstances and aren't as impossible as some claim.

If I remember correctly the zimbabwe dollar gained incredible value, more than 300 times growth(?), as it rebounded from its last hyperinflation. The venezuelan bolivar could potentially sustain incredible growth, greater than 100 times value in 1 year, if venezuela's economy stabilizes and recovers. Massive increases in price or value may not be as rare or extraordinary an event as some believe.

It is difficult to determine the fair price of Bitcoin. Why did not have stabilized anymore. It is difficult to say whether the price will be fixed in the future.

This strategist's comment is so theoretical it's almost a joke.

There is a right and wrong Bitcoin price. The test of that is whether anyone in the world would accept a bitcoin for any price above face (right now). Most people would accept bitcoin for a small premium because they'll have faith that the price would soon pass their buy price, but it's only a small amount of premium that would be accepted.

Would you buy my 1 bitcoin for $10,000? No. You'd say "that's the wrong price!"

This strategist just doesn't know how to value a currency that isn't backed by the GDP of a country. That's all it is.

The current value it's a fair value based on trading price and i think it should be valued 7300$ for 1 bitcoin, people will define the value of cryptocurrency and it possible can be even biger value

Think of the larger outside force controlling all this: the unrestrained global supply of fiat currency/credit...too much pumped in too many hands

Ordinary people couldn't possibly invest billions every day, big companies wont take such risks to invest on Bitcoin like now. central banks with the help of their governments are pushing the price up, they know if you have the majority of the circulating supply, you could seize control of the market flow.
Bitcoin has no fair value, Bitcoin is trying to be a vault for money, not just any money but all the money in the world.

Pretty much this, because with no Balance sheet and earnings to report from you have no way of assigning proper value. And for this reason you must revert to the simple laws of supply and demand to determine a fair price.

This price may not be accurate at what an actual bitcoin is truly worth but given it is the price the market will pay for a bitcoin then yeah I think this is as close as we get towards a fair price point.

This rise in price of bitcoins is mainly because of the upcoming fork segwit2x which would have deep impact on bitcoins and many people has started to invest more and more in bitcoins as it is predicted that after fork bitcoins will increase.Well i don't think so that bitcoins will have a fixed fair value as price of the bitcoin is depended on the demand from the people so how much a person is will to give will be generally the price of a thing.But I do think that this price is because of fork so there would be correction after this fork and that price would be fair value for that time.Fair value would keep on changing as more people invests in bitcoins.

The fair value of bitcoin is the price that people are willing to pay for it. Right now it is around $7200

How can there be a "fair" value for bitcoin.

In the first place, there isn't even a tangible bitcoin; it is just a digital entry in a public internet file - the blockchain. The price of bitcoin is just the spot price in any trading platform. So at any time - as long as there is a "fair" global spot market - there is a spot price; it is neither fair nor unfair. Without the internet, there is not even a price for bitcoin.

Even physical gold does not have any fair price, only what the buyers/sellers quote.

As long as there is need for it and people tend to make use of it the more, then the value at that stage would always be fair. For example, in Zimbabwe, the government implemented a control policy where the citizens cannot do any international transfer except local transfer as there is low supply of cash since they had to depend on making use of the USD for now with their own bad currency.

People then, started shifting to bitcoin as the only means for international transfer, for businesses and international trading which has made bitcoin to be trading above $12,000. That is what the demand for it over there has caused and that is fair considering that someone is willing to pay for it at that price due to its usefulness.

I have a lot of things to say, though I don’t really know how to put cause I’m not an economist, but first I will start by saying there is no fair value for Bitcoin. Yes, there is no fair value, whatever you see there is the value, nothing like fair and unfair. I don’t know how price is being determined, so I can’t really tell.

One thing I know is that I see people say that price is being determined by how much people are investing and stuffs like that. And my question is who is ready to buy at a rate that is too high, cause you said the value is determined by what people are willing to buy.

Bitcoin has no definite value, it is designed to fluctuate to make opportunities to the user, this is the most indulging part of making btc business, Lets expect more, and will eventually lift our motivation to dig more,

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

The fair value of bitcoin depends upon the circulated options through the value of price. Whether it can reach the higher or it might be pump or a dump that can people accept. It is the options, people that can get through a lot.

Bitcoin's value is said to be "overvalued", with it's price so high and we still don't know what it might reach in the future, it might pump or dump. With a lot of people using and the increasing demand, Bitcoin will be still in the value where people might say "unfair", but for the people that predicted this will happen, it is pretty fair and predicted.

There's no a fairness  limitation for a cryptocurrency. even in my opinion, current prices have already shown unfairness. but if we seen from the demand and limited stock, didn't rule out bitcoin prices will continue to rise as more users and investors. therefore, with its limited number and increasing demand, so we can't determine the fairness of bitcoin prices.

Also since it is so new and so many mainstream avenues not involved yet we need to factor these in.
Every major addition creates a push on demand whether it is a large retailer of like CME from this week.
Those are incredibly difficult to quantify

NOT REALLY, if the DEMAND is Higher then the PRICE will be Higher, Even if the supply will become lower, without the Demand, the price will never go higher.

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I do not like FAIR VALUE but rather a stable one, we still can't see what will be the peak of Bitcoin, Fair Value will still be an issue and a 'flaw'-as how central bank see Bitcoin's volatile price-, we will have a lot of time waiting for the perfect price of Bitcoin, a lot of new highs and correction will happen before we can achieve a stable movement of price.

It's all based on how much people are willing to pay for the coin and how much people are willing to sell it.

About the Transaction Volume, it's just help to determine whether the price is "legit" or not, if the price has gone up and the transaction's volume remained low, it means that the price has been gone up because of a market manipulation and not because an increase in demand( or decrease in supply).

About the bitcoin hoarding, the more people that hoards bitcoin, the more it increases it's price, because supply will become lower, so price goes higher.

All three of those make sense--I can see how each would contribute to bitcoin's value/price.  But I don't see how one could possibly come up with any kind of formula/analysis method to say how they actually do contribute.  For #1, you at least have some data that you can try to use, but I think #2 and #3 are impossible to calculate.  Even worse, I think they all interact and feed off of each other.  For example, if people see higher transactional demand (#1), they may decide to hold their bitcoin longer (#2).  Or if a country tries to ban bitcoin (#3), that could lead to more transactions (#1) and less investment (#2) as people sell, but then there would be fewer users so the transactions would go down (#1), which would discourage people from buying (#2), except that price has now fallen a lot, so more people see it as a good buy, so investment starts to climb again (#2), and on and on we go....

Even if we do force fit a model to value Bitcoin, it becomes kind of impossible to valuate the parameters associated with it. We have reduced the problem from evaluating the price of Bitcoin to evaluating the associated parameters, but we are no closer to the answer. Maybe we should sit back and just let the market decide.

Yesterday, BlackRock Strategist Richard Turnill said there’s no inherent right or wrong Bitcoin price, no fair value. On multiple occasions Bitcoin has been criticized for lacking fair value. I haven't come across any stats or traditional methods that can be used to calculate Bitcoin's fair value, but does that mean Bitcoin doesn't have a fair value?

I found an article on Investopedia about how to measure Bitcoin's fair market value. I don't think this framework is statistically accurate, but theoretically plausible. Almost all predictions regarding Bitcoin price are speculative in nature, but backed by a solid belief that Bitcoin's scarcity and its underlying technology is potentially revolutionary which would have an impact on different sectors. Bitcoin has value because people think it has value, right. It means Bitcoins have positive expected value.

The total market value of a currency, its "monetary base", is driven by two things, transactional demand and reservation demand.

1. Transactional demand - Daily transaction volume.

2. Reservation demand - Hoarding/long-term investment.

It is expected that with more merchant adoption the transactional demand would increase.

3. Hurdle rate - Rate of return required to compensate for the risks associated with holding Bitcoin. Yeah, technopolitical hurdles or backlash from a country can have an impact on Bitcoin's expected value.

Theoretically, the fair-market value of one BTC should simply be the dividend of its predicted future monetary base (total market cap) and BTC in circulation, discounted by a "hurdle rate."


http://www.investopedia.com/articles/investing/050914/easy-way-measure-bitcoins-fair-market-value-doityourself-guide.asp?