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February 07, 2018, 09:57:36 PM |
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Having followed a large number of threads across various forums discussing what reasonable price levels of BTC are (or discussing one of it's derivatives: how low BTC can go, how high BTC can go, etc.), it is striking how little substantive arguments are provided. Most simply share a feeling or an opinion ... but as the saying goes : "opinions are like buts: everybody has one, and all of the stink".
So, I would like to see whether it's possible to have a reasoned debate at all about pricing levels or valuation models of BTC using "verifyable" or "testable" arguments. I put "verifiable" / "testable" in quote, as I would be quite satisfied in hearing about potentially or theoratically rather than practically verifyable arguments.
To get the ball rolling, I'm sharing here the one argument which I find plausible and convincing (unfortunately I lost the original source of the argument and am not claiming it to be an original thought of mine):
Proposition: A hard to break price floor for BTC is USD 5000
Rational : The most powerful owners of BTC at present are the professional miners. At present, the average cost for a miner per BTC, including some minimal profit margin, is USD 5000. For any dollar the BTC price drops below USD 5000, miners start losing money and thus the incentive for them to reduce liquidity and prop up the price increases significantly. Thus, unless there are significant structural or disruptive technology changes (e.g. working quantum computer), USD 5000 can be considered the bottom for BTC.
Curious what other "models" people in here are using or what you think about the miner-focused rational.
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