Even at 10kUSD, Bitcoin is undervalued by more than 67,000%

[Snerx]

A short thing on the growth and projected 'true' values of Bitcoin; the tables for the current and projected valuations are from the last page (page 3) - https://snerx.com/archive/Garon-CryptoInvestmentNotes.pdf

I am probably wrong about my notes on this, so if I'm pulling numbers incorrectly, please let me know. If I'm not wrong, then the data from my notes is a non-arbitrary objective measurement for the future stable price of Bitcoin, which is a big deal, since the conservative estimates still place the 'true' price per coin at $6,733,333.33 USD (formulation in my notes on page 3).

Please discuss, I feel like I am wrong about this number but I can't tell why.

https://i.imgur.com/GDiuVIs.png

[EDIT]
I'm including the other table since you're all too busy to read the actual document lol...
https://i.imgur.com/cD6a42k.png

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[fabiorem]

This price would be if adopted worldwide? I mean, if it was used as a real currency?

[cpfreeplz]

It's hard to say how niche or how widely adopted bitcoin will be one day though. If only 1% of the population owned some bitcoins we'd see a massive price increase. We're not even remotely close to that though. I guess we'll never know how many people actually use bitcoin.

[magneto]

BTC isn't going to be the entire M2 or M3 monetary supply, of course.

Though even 1% of it would mean that it is still significantly undervalued, which in my opinion, could definitely occur in the near future. But it obviously will depend on the dream of mass adoption by the general public becoming true.

My advice is definitely save some BTC for the long term, it's going to be a good decision to make for sure.

[davis196]

A short thing on the growth and projected 'true' values of Bitcoin; the tables for the current and projected valuations are from the last page (page 3) - https://snerx.com/archive/Garon-CryptoInvestmentNotes.pdf

I am probably wrong about my notes on this, so if I'm pulling numbers incorrectly, please let me know. If I'm not wrong, then the data from my notes is a non-arbitrary objective measurement for the future stable price of Bitcoin, which is a big deal, since the conservative estimates still place the 'true' price per coin at $6,733,333.33 USD (formulation in my notes on page 3).

Please discuss, I feel like I am wrong about this number but I can't tell why.

There`s no such thing as "true" value.The market decides about the value of every asset.
Todays bitcoin price is the only "true value".Future predictions about 1 million USD bitcoin price after 1 year
are only predictions and nothing more.We can`t decide wether bitcoin is overvalued or undervalued.
Some people say it`s overvalued and we are at the end of the bubble.How can you convince them that btc is undervalued?

[Don Pedro Dinero]

A short thing on the growth and projected 'true' values of Bitcoin; the tables for the current and projected valuations are from the last page (page 3) - https://snerx.com/archive/Garon-CryptoInvestmentNotes.pdf

I am probably wrong about my notes on this, so if I'm pulling numbers incorrectly, please let me know. If I'm not wrong, then the data from my notes is a non-arbitrary objective measurement for the future stable price of Bitcoin, which is a big deal, since the conservative estimates still place the 'true' price per coin at $6,733,333.33 USD (formulation in my notes on page 3).

Please discuss, I feel like I am wrong about this number but I can't tell why.

There`s no such thing as "true" value.The market decides about the value of every asset.
Todays bitcoin price is the only "true value".Future predictions about 1 million USD bitcoin price after 1 year
are only predictions and nothing more.We can`t decide wether bitcoin is overvalued or undervalued.
Some people say it`s overvalued and we are at the end of the bubble.How can you convince them that btc is undervalued?

I think you are both wrong.

Price is different from value. Some assets have a price higher than their value and the other way around. The problem is, there is no algorithm for this, and its difficult to calculate a fair value for assets like stocks, so it’s even more difficult to calculate for bitcoin, if it is possible at all.

However, in focusing on current price because he is talking about true value if something happens in the future (% of global adoption), and we don’t know for sure if that will happen.

[Pursuer]

one thing is for sure, there is no right or wrong when you are talking about bitcoin's value. the only thing that we can all agree on is that bitcoin is undervalued but there is no real possible way of telling "by how much". what OP is saying here is pretty interesting in my opinion, and I have seen some more like this and sometimes they try to use models that are not so compatible with bitcoin and when you add the unpredictable nature of adoption to the equation everything becomes a guesswork.

[warrior333]

For me there is no such thing as undervaluation of the currency. She always has a real price. This price may vary depending on various reasons but there will always be real. The prospect of rising prices of bitcoin are very high. But we live in the digital age. This means that the dog is much faster and circumstances can change with great speed.

[joinfree]

Do you know how crazy it is to say that bitcoin is going to be worth $6,7 million dollars? It is insane, and that is a lot of money. Those who are holding more than 100 bitcoins would have money that they are not even going to be able to count it.

It is not going to reach that price, of course, the whole blockchain and the bitcoin ecosystem is not ready to reach that price, because the system is full of kids and crazy people trying to be millionaires just by investing a few dollars that they daddy's gave to them.

Even $50k is a huge amount of money, but that is a realistic price, not an imaginary price like six millions.

[player514]

Do you know how crazy it is to say that bitcoin is going to be worth $6,7 million dollars? It is insane, and that is a lot of money. Those who are holding more than 100 bitcoins would have money that they are not even going to be able to count it.

It is not going to reach that price, of course, the whole blockchain and the bitcoin ecosystem is not ready to reach that price, because the system is full of kids and crazy people trying to be millionaires just by investing a few dollars that they daddy's gave to them.

Even $50k is a huge amount of money, but that is a realistic price, not an imaginary price like six millions.

Yeah, I have to agree with you. I don't really believe that 6 million is a very valid price to put bitcoin at -- at least now. Everyone knows that this extreme growth that we saw in the past year is not sustainable; at one point in the future it will have to fall apart. The best we can do now is to think more in the present and short term future, because you don't know what's going to happen next with the long term future.

[cellard]

Do you know how crazy it is to say that bitcoin is going to be worth $6,7 million dollars? It is insane, and that is a lot of money. Those who are holding more than 100 bitcoins would have money that they are not even going to be able to count it.

It is not going to reach that price, of course, the whole blockchain and the bitcoin ecosystem is not ready to reach that price, because the system is full of kids and crazy people trying to be millionaires just by investing a few dollars that they daddy's gave to them.

Even $50k is a huge amount of money, but that is a realistic price, not an imaginary price like six millions.

So what? before the computers era, we had Saudi billionaires with 200 Ferraris, golden palaces, and a lot of other absurd wealth and opulence. They did nothing to deserve that but being born on top of some oil mines.

When the computers era started, some guys on their garage became the richest guys in the world: Bill Gates, Mark Zuckerberg, etc, richer than these Saudi billonaires.

If before the computers and internet era, you told someone that these Saudi kings would get surpassed by some nerds on their garages you would have thought the person saying this was insane.

Also, just limiting wealth growth to the context of the dotcom bubble, notice how we haven't seen anything yet.

[readygoaw]

A short thing on the growth and projected 'true' values of Bitcoin; the tables for the current and projected valuations are from the last page (page 3) - https://snerx.com/archive/Garon-CryptoInvestmentNotes.pdf

I am probably wrong about my notes on this, so if I'm pulling numbers incorrectly, please let me know. If I'm not wrong, then the data from my notes is a non-arbitrary objective measurement for the future stable price of Bitcoin, which is a big deal, since the conservative estimates still place the 'true' price per coin at $6,733,333.33 USD (formulation in my notes on page 3).

Please discuss, I feel like I am wrong about this number but I can't tell why.

Curious information. I wonder, who will give at least one tenth of this price for BTC, if even it is the last mined coin?

[Snerx]

I apologize in advance for this wall of text lol.

This price would be if adopted worldwide? I mean, if it was used as a real currency?

Yes to the first question, no to the second. The paper details what the 'adoption' means.

It's hard to say how niche or how widely adopted bitcoin will be one day though. If only 1% of the population owned some bitcoins we'd see a massive price increase. We're not even remotely close to that though. I guess we'll never know how many people actually use bitcoin.

You should read the paper, it btfo's what you just said.

BTC isn't going to be the entire M2 or M3 monetary supply, of course.
...

Yea, the first table shows M0 adoption at 1% still putting it at $22,035.93 USD.

There`s no such thing as "true" value.
...
We can`t decide wether bitcoin is overvalued or undervalued.
Some people say it`s overvalued and we are at the end of the bubble. How can you convince them that btc is undervalued?

I said the value is objective and non-arbitrary, a positive claim, with sourced justification and you simply say, "nah" as if that invalidates my claims? Okay bud, read the paper again.

I think you are both wrong.

Probably.

... The problem is, there is no algorithm for this, and its difficult to calculate a fair value for assets like stocks, so it’s even more difficult to calculate for bitcoin, if it is possible at all.

However, in focusing on current price because he is talking about true value if something happens in the future (% of global adoption), and we don’t know for sure if that will happen.

Are you sure there's no algorithm? The one I laid out seems pretty good, and if not, explain why with justification please.
Are you sure we don't know that this will happen in the /future/? That seems like an odd claim considering the 1% adoption has /already/ occurred in the way the paper describes.

one thing is for sure, there is no right or wrong when you are talking about bitcoin's value. the only thing that we can all agree on is that bitcoin is undervalued but there is no real possible way of telling "by how much". what OP is saying here is pretty interesting in my opinion, and I have seen some more like this and sometimes they try to use models that are not so compatible with bitcoin and when you add the unpredictable nature of adoption to the equation everything becomes a guesswork.

Why can't we tell by how much? What is wrong with my model? If we can agree it's undervalued, what standard are we using for that agreement; surely this standard can be used (at least in part) to determine the true value based on Bitcoin's ties to use/function in the real world, no? The future is unpredictable, sure, and the /real/ floating price may never even come close to matching it's objective price tied to it's use in the world, but I don't see why it's /true/ or /use/ value is all guesswork.

For me there is no such thing as undervaluation of the currency. She always has a real price. This price may vary depending on various reasons but there will always be real. ...

Okay, but I'm not talking about the real floating price, I'm explicating valuations based on the technology's current /use/. Surely you can see this as a useful metric in itself, no?

Do you know how crazy it is to say that bitcoin is going to be worth $6,7 million dollars? It is insane, and that is a lot of money. Those who are holding more than 100 bitcoins would have money that they are not even going to be able to count it.
...
Even $50k is a huge amount of money, but that is a realistic price, not an imaginary price like six millions.

I agree, that is way too much money to jump to right now, the system would break if it shot up to that level over night. However, people like Voorhees and Antonopoulos have said that if Bitcoin becomes globally recognized as a currency, or even adopted as a reserve currency, the planet would see its first trillionaires. I don't think this notion should be dismissed entirely.

TL;DR: None of these are valid counterpoints or objections to the model, fight me lol.

[Beerwizzard]

As hopefully most of this forum I truly belive that bitcoin is underpriced and value of the free decentralized money will definetely raise in future but no one can predict thebitcoin price in future, even most of the professional financers making wrong forecasts about it.

Okay, but I'm not talking about the real floating price, I'm explicating valuations based on the technology's current /use/.

Imho the valuation that based on current use you can find if you just open BTC charts and see the market. That will be its current value (ofc if it is not attacked, hoped or anything else happened).

[orions.belt19]

Do you know how crazy it is to say that bitcoin is going to be worth $6,7 million dollars? It is insane, and that is a lot of money. Those who are holding more than 100 bitcoins would have money that they are not even going to be able to count it.

It is not going to reach that price, of course, the whole blockchain and the bitcoin ecosystem is not ready to reach that price, because the system is full of kids and crazy people trying to be millionaires just by investing a few dollars that they daddy's gave to them.

Even $50k is a huge amount of money, but that is a realistic price, not an imaginary price like six millions.

I could believe in $50K while $6,7M is just way too big. Just imagine the profits of those early adopters who up to this day, still have some coins in their arsenal. At this price, they have already profited millions while at that kind of price, they'll get crazy rich.

If ever the price were to really rich that amount, I'd say it would probably take a decade. It would be too hard for a man to attain 1 BTC at that amount and it's going to be messy and chaotic just thinking about it.

[Don Pedro Dinero]

... The problem is, there is no algorithm for this, and its difficult to calculate a fair value for assets like stocks, so it’s even more difficult to calculate for bitcoin, if it is possible at all.

However, in focusing on current price because he is talking about true value if something happens in the future (% of global adoption), and we don’t know for sure if that will happen.

Are you sure there's no algorithm? The one I laid out seems pretty good, and if not, explain why with justification please.
Are you sure we don't know that this will happen in the /future/? That seems like an odd claim considering the 1% adoption has /already/ occurred in the way the paper describes.

Yes, I am sure no algorithm takes into account what will happen if Trump and Kim Jong-un start playing with atomic bombs and we all disappear. Mathematical projections like that one leave aside many events.

He is talking rubbish:

“A  quick  way  to  check  whether  the  price  of  Bitcoin  is  actually  in  "a  bubble"  is  by  taking  its  total supply (16.7 million current circulating supply, 17 21 million hard-cap) and diving it from 1% of the M0-M3 global  money  supply (representing  a  1%  global  adoption)  and  seeing  how  much  each  coin  should  be worth.  Considering  that  blockchain  technology  is  used  as  the  backbone  of  the  NYSE  and  most of  the major world banks already, the percentage is probably closer to 20%, so both numbers will be calculated in the following table to show a wide range of adoption.”

Blockchain technology used by banks and NYSE has nothing to do with bitcoin adoption.

[Snerx]

Imho the valuation that based on current use you can find if you just open BTC charts and see the market. That will be its current value (ofc if it is not attacked, hoped or anything else happened).

This misses the point completely, and further, it misunderstands what the numbers in the tables represent. The floating price of the currency is not the same as it's value, someone explicitly talked about this earlier in the thread. Also, what you are calling current use is not the same as what I am calling use/function. If you read the paper, you'd notice that use/function of Bitcoin is in relation to the adoption of services that Bitcoin's blockchain technology made possible. Maybe this is not clearly stated in the paper, but it is stated.

Blockchain technology used by banks and NYSE has nothing to do with bitcoin adoption.

Except it very much does. Even if bitcoin itself isn't the technology being used for these services, Bitcoin's adoption and/or price scales proportionately to the adoption of the services it made possible. You can track this fairly reliably, and to deny this is silly.

Yes, I am sure no algorithm takes into account what will happen if Trump and Kim Jong-un start playing with atomic bombs and we all disappear. Mathematical projections like that one leave aside many events.

This is a terrible argument. This is it's own reductio it's so bad. The same line of reasoning leads to saying that any model of valuation (or any projection model or statistic for that matter) is nonsense because it doesn't include every other fact in the world. How can you ever know anything at all if what you're saying is true? You've just imploded the entirety of epistemology, this self-defeats.

[bribed]

I think comparing Bitcoin value with potential adoption is hard to make, since the market is only driven by supply and demand and the price is artificial. A bitcoin stays a bitcoin, no matter how much one pays for it. Sure when there is more adoption and therefore demand the price will go up. But not endlessly. This makes no sense to me, otherwise we would need to give Bitcoin more decimals and I dont know if that would be even possible. As far as I know its fixed at 8, and to be honest, thats enough.

[tweetbit]

I’ll be better knowing that bitcoin is undervalued for now than those other members putting this issue differently like it’s a bubble and is overvalued. I know this calculation can’t be given the right look to it as it’s more of a prediction without proper data as we all know cryptocurrency is not the same as stock market that is totally explored and studied.

[Snerx]

I think comparing Bitcoin value with potential adoption is hard to make, since the market is only driven by supply and demand and the price is artificial. A bitcoin stays a bitcoin, no matter how much one pays for it. Sure when there is more adoption and therefore demand the price will go up. But not endlessly. This makes no sense to me, otherwise we would need to give Bitcoin more decimals and I dont know if that would be even possible. As far as I know its fixed at 8, and to be honest, thats enough.

Two things. First, the decimal division of Bitcoin is displayed out to 8 decimal points, but adding additional decimals is arbitrary to achieve and the code allows for an infinite amount of these. Second, a Bitcoin does stay a Bitcoin, but Bitcoin's ties to real-world assets like the real-estate market do not stay the same, and so the value of Bitcoin's ties to the rest of the world does not stay the same, this makes calculating this metric an important if not interesting calculation.

I’ll be better knowing that bitcoin is undervalued for now than those other members putting this issue differently like it’s a bubble and is overvalued. I know this calculation can’t be given the right look to it as it’s more of a prediction without proper data as we all know cryptocurrency is not the same as stock market that is totally explored and studied.

How is it without 'proper data'? How does crypto being dissimilar to stock invalidate the metric given in the paper?