I want to believe too, but I find it hard to believe that we will pass something like $5,000 per coin. Trust me, I would love to be wrong, and pass $10,000. I just logically don't see it...
I think mathematically we would need to be much higher than current prices if BTC is going to truly become a competitor to a Visa or Mastercard, I just don't know where the top would be...
Well, here's the math for the 5-figure bull-case:
http://www.honestnode.com/bitcoin-fair-value-a-first-assessment/...Our analysis determines that one bitcoin must be worth $27381 in order to support 10% of common medium-of-exchange economic activity, plus well under 10% of existing common store-of-value demand.
I would love to support this, but in my opinion, there were at least couple of problems with the article:
1) Bitcoin as 10% of the remittance market is nothing short of wild speculation. It seems unlikely.
2) I believe the author has miscalculated velocity. He's looking at, I believe, things like mining transactions and including them in velocity calcs. This would be akin to counting the printing press moment as a velocity event, but I do not think USD velocity calcs work that way.
3) I believe that the M2 calculation is actually the appropriate one to make--which I don't typically see, so I really like that he's working with M2 as a fundamental building block to determine value. But I think it's pegged in a very arbitrary fashion in this article.
4) I'm having a hard time understanding why these elements he identifies would all be additive. Take the M2 calculation, for example. It's probably a good measure. But the uses he identifies and ADDS to the M2 value determinant are really just part and parcel of M2.
That said, I'm open to being told why I'm wrong. I'm an MBA and I do a lot of microecon work, but I don't have as much exposure to macro.
