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Author Topic: What is Bitcoin's fair value?  (Read 1501 times)
centralbanksequalsbombs
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December 03, 2017, 12:23:37 AM
 #81

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://bitcointalk.org/index.php?topic=2434870.0

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Sled
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December 03, 2017, 02:34:55 AM
 #82

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.
nieninja53
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May 20, 2018, 12:06:34 PM
 #83

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,
Burogh
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May 20, 2018, 12:10:40 PM
 #84

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

Direwolve735
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May 20, 2018, 12:13:33 PM
 #85

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 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.
13risingforce
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May 20, 2018, 12:46:01 PM
 #86

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.
Dudeperfect
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May 21, 2018, 04:37:26 PM
 #87

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).
BitcoinLoan
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May 21, 2018, 04:48:45 PM
 #88

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).
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.
osh5
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May 21, 2018, 06:11:16 PM
 #89

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. Smiley
websoftwareengineer
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May 21, 2018, 06:13:49 PM
 #90

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."

Quote
For further illustration, it might also help to consider how a venture capitalist could determine the net present value of an investment that he never expects to generate positive cash flows during his firm's investment period (e.g. a high-growth tech company that reinvests 100% of its earnings before it ultimate sells to Google). In the absence of earnings, that VC might look at revenue multiples to determine the company's terminal value, and then discount that figure by a rate of 40 to 60%.

With Bitcoin, the thinking is the same. Except Bitcoin's terminal value is actually its future monetary base.

This framework relies on assumptions only, but backed by Bitcoin having all the attributes of money, its scarcity and underlying technology.

A rational market price for something that is expected to increase in value will already reflect the present value of the expected future increases. In your head, you do a probability estimate balancing the odds that it keeps increasing.

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

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.

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