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Title: Even Wall Street’s “dean of valuations” can’t value bitcoin Post by: alyssa85 on October 26, 2017, 04:39:50 PM https://qz.com/1111751/bitcoin-btc-price-dean-of-valuation-says-it-cant-be-valued/
Quote The New York University professor known as the “dean of valuations” for his expertise in assigning a value to various assets is stymied by bitcoin. “It cannot be valued,” wrote Aswath Damodaran on his blog yesterday. Here’s how Damodaran gets to that conclusion. First, he says, prospective bitcoin buyers must decide whether it is one of the following: Asset: Something that generates cash flows, such as bonds, stocks, or options. Cash flows can be used to derive a fundamental value for that asset. Commodity: Something that is used as a raw material, such as oil, coal, or gold. Its utility as a raw material is used to derive a value. Currency: A medium of exchange that does not generate cash flows. As a result, it can’t be valued. Collectible: Something with aesthetic value but no cash flows, and no function as a medium of exchange. Examples are baseball cards, or a painting. As a result, it can’t be valued. Damodaran says bitcoin isn’t an asset, because it doesn’t generate cash flows; nor is it a commodity, because it’s not a raw material. So it’s either a currency or a collectible, and he comes down on the side of the former, because it fulfils the three characteristics of money. Although currencies and collectibles can’t be valued, they can be priced, Damodaran says. Whereas valuing something depends on analysis of cash flows, growth prospects, and risk, pricing something depends on market psychology, news, and instinct. Bitcoin’s long-term price will depend on whether it turns out to be one of three things, Damodaran argues: It could become a widely used, global, currency; a kind of digital gold favored by millennials; or a modern-day tulip bulb craze. Title: Re: Even Wall Street’s “dean of valuations” can’t value bitcoin Post by: player514 on October 26, 2017, 04:53:03 PM https://qz.com/1111751/bitcoin-btc-price-dean-of-valuation-says-it-cant-be-valued/ Quote The New York University professor known as the “dean of valuations” for his expertise in assigning a value to various assets is stymied by bitcoin. “It cannot be valued,” wrote Aswath Damodaran on his blog yesterday. Here’s how Damodaran gets to that conclusion. First, he says, prospective bitcoin buyers must decide whether it is one of the following: Asset: Something that generates cash flows, such as bonds, stocks, or options. Cash flows can be used to derive a fundamental value for that asset. Commodity: Something that is used as a raw material, such as oil, coal, or gold. Its utility as a raw material is used to derive a value. Currency: A medium of exchange that does not generate cash flows. As a result, it can’t be valued. Collectible: Something with aesthetic value but no cash flows, and no function as a medium of exchange. Examples are baseball cards, or a painting. As a result, it can’t be valued. Damodaran says bitcoin isn’t an asset, because it doesn’t generate cash flows; nor is it a commodity, because it’s not a raw material. So it’s either a currency or a collectible, and he comes down on the side of the former, because it fulfils the three characteristics of money. Although currencies and collectibles can’t be valued, they can be priced, Damodaran says. Whereas valuing something depends on analysis of cash flows, growth prospects, and risk, pricing something depends on market psychology, news, and instinct. Bitcoin’s long-term price will depend on whether it turns out to be one of three things, Damodaran argues: It could become a widely used, global, currency; a kind of digital gold favored by millennials; or a modern-day tulip bulb craze. It's amazing how bitcoin has busted past so many people's evaluations of the coin. Time and Time again, it proves the naysayers wrong, and I think the strong volatility of it (which has been a good thing for Bitcoin so far) is really what messes people up. It's just so multi-faceted and no one has really seen anything similar to it. I like how Damodaran really breaks down the uniqueness of bitcoin and why people haven't really seen anything like it so far. Honestly, I feel as if Bitcoin will start being accepted more in the near future. Title: Re: Even Wall Street’s “dean of valuations” can’t value bitcoin Post by: Torque on October 26, 2017, 05:25:50 PM On Gold, these people just want to keep selling the lie.... keep gaslighting the public to believe an untruth:
Gold's intrinsic utilitarian "value" as a commodity (ie., industrial uses) only accounts for about 5% of it's actual price/ounce. The other 95% of its price value is pure speculative value as money (based on cost to mine/refine a single ounce + profit markup), and even that is highly undervalued compared to outstanding fiat and derivatives. No way in HELL does the price of Gold represent its intrinsic industrial usage value. Not even close. Title: Re: Even Wall Street’s “dean of valuations” can’t value bitcoin Post by: gentlemand on October 26, 2017, 07:36:42 PM I don't really understand why those on the sidelines are so desperate to categorise, condemn, pigeon hole or predict. It's going to carry on doing its thing no matter what they spout and no one can tell anyone where it's going to lead.
History is littered with people who ended up looking like morons when it comes to BTC. I wouldn't be adding to it myself. Title: Re: Even Wall Street’s “dean of valuations” can’t value bitcoin Post by: jjacob on October 26, 2017, 07:44:09 PM If he had figured out how to value it, he might have become rich. ;) You don't need to know how to value it. Just believe in it and hold it for a few years. The market will decide how to value it.
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