"Real" Value of Bitcoin?

[kaopxa]

Has anyone else developed a model for valuing Bitcoin? What number did you reach?

Context: I believe Bitcoin is currently overvalued by around $500. I have been playing with some valuation models recently (have a quant/finance background) and have been measuring relationships between wallet growth, tx info like volume and fees, and transaction velocity against social sentiment over time, which got me to a "true" value of ~$5812. This isn't exactly speculation, but it's not baseless either so I'm interested in how you guys have approached the problem.

[franky1]

seems you got the same numbers as me for a 11 month sentiment value.

numbers i got were from the LOW's of the last 11 month where people refused to sell below. which if you look at the UTXO movements of the last 11 months over 70% of utxo's moved while prices were over that amount, meaning the psychology is people were moving coin and thinking of the price of bitcoin atleast $5800 but refusing to sell for less

then if you do the math of 50exa / 14thash asic and calculate the electric used per block then per btc. .. and also spread the ASICS hard war cost over a year before replacements/upgrades puts asic mining costs above $5800.. again miners wont sell for less than their mining cost

so because people were selling BTC down to $5800 but never below $5800 for 11 months. the sentiment is that $5800 is the bottomline.

that said. thats kinda slowly being outdated as there is a new 3-4 month sentiment of around $6100. but the amount of transaction movements of 3-4 months is not a clear 'majority', so too early to call $6100 a milstone limit.
and soon new more efficient ASICS are to be launched.. so that may test the $6100. so i am going to see if december (by the time the new asics are online) tests the $6100 or $5800 lines

[kaopxa]

seems you got the same numbers as me for a 11 month sentiment value.

numbers i got were from the LOW's of the last 11 month where people refused to sell below. which if you look at the UTXO movements of the last 11 months over 70% of utxo's moved while prices were over that amount, meaning the psychology is people were moving coin and thinking of the price of bitcoin atleast $5800 but refusing to sell for less

Would love to talk more about this. UTXO analysis is something I haven't fully drilled down yet.

and soon new more efficient ASICS are to be launched.. so that may test the $6100. so i am going to see if december (by the time the new asics are online) tests the $6100 or $5800 lines

Wouldn't more efficient miners allow the price to be lower? More hashpower for less $$, plus old miners retiring gear?

[BuyBuyBitcoin]

I believe Bitcoin is currently overvalued by around $500. I have been playing with some valuation models recently (have a quant/finance background) and have been measuring relationships between wallet growth, tx info like volume and fees, and transaction velocity against social sentiment over time, which got me to a "true" value of ~$5812. This isn't exactly speculation, but it's not baseless either so I'm interested in how you guys have approached the problem.

Why would this even matter while we are in such early days of bitcoin? It's obviously undervalued if you're investing long term and expect to have a decent return 5-10 years from now.

[Bitcoinnation]

About a month ago, I saw certain website state an almost same value as yours... On I don't remember it's name but I dunno whether they were using your very approach to estimate the value or not, but if it's not the same approach then this is quite impressive

[franky1]

and soon new more efficient ASICS are to be launched.. so that may test the $6100. so i am going to see if december (by the time the new asics are online) tests the $6100 or $5800 lines

Wouldn't more efficient miners allow the price to be lower? More hashpower for less $$, plus old miners retiring gear?

yep
. i just done the math..
for the S9 asics
52exa was the $5800 line
for the new T15 asics
65exa is the $5800 line

right now while the hashrate is around the 52exa average. if the entire mining community had T15 asics (delivery isnt until after christmas, but roll with my 'if' scenario)
then pools would get 1800 btc a day where each btc would cost them less.. ($4500)
now IF all 1800 coins a day were sold simultaneously at the same time. it would put enough down pressure to make the price go down below the shortterm support of $6100

but as you can see. many ifs.
1. if the hashrate remained at 52exa to late december so that asics were profitable for less that $5800
2. if all pools had T15 asics so that a whole day of coin rewards 1800 were created at lower cost
3. if all pools sold said coins at the same time.

so as long as the hashrate climes to 65exa by christmas. then those using t15 after delivery(christmas) will have a cost of over $5800 per btc.. thus they wont want to sell for less thus the 11 month baseline of $5800 will remain intact
 

[pixie85]

If you're calculating it by comparing the prices of hardware you're not coming up with the real value but the lowest possible value that keeps miners mining. Why would the lowest value be the "real" value? You don't measure the real value of a car by the cost of parts and labor needed to make it. If we did that a lamborghini would be worth $50,000 instead of 500,000.

[franky1]

Why would this even matter while we are in such early days of bitcoin? It's obviously undervalued if you're investing long term and expect to have a decent return 5-10 years from now.

If you're calculating it by comparing the prices of hardware you're not coming up with the real value but the lowest possible value that keeps miners mining. Why would the lowest value be the "real" value? You don't measure the real value of a car by the cost of parts and labor needed to make it. If we did that a lamborghini would be worth $50,000 instead of 500,000.

to answer you both:

value Vs price....

bitcoin is at what most would say is at great "value" right now. because the price is ABOVE a long tested VALUE. but not much.


take many things.
businesses tend to want to markup costs vs retail price at a 3x multiple. to cover labour bills and profit
(ya some get greedy and want more.. eg coffee costs pennies for ingredients but sell for over couple dollars 10x)

so if the acquisition(cost/base) VALUE is $5800 and the PRICE is $6400. thats not even 10%(0.1x), let alone 300%(3x) so people see bitcoin as very valued and at a good low PRICE to buy

however SELLERS see it under PRICED

the 300% markup retailers, industrials and manufacturers go by is normal..
100% to pay off the acquisition COST. 100% to cater for other expenses involved and 100% profit

consumers over the decades of retail psychology are usually happy and willing to pay out at 3x of a products cost for the convenience of not having to do the hard work of manufacturing things themselves.. its been like that since retail psychology began

even in bitcoin when costs since last year were $5800 or more. people were willing to pay upto $18k(3x markup) and then the desire slipped away at $20k

same goes for most things.

if you can work out the COST of something you can generally work out the zone of desire (as long as the 'product' has utility)

EG
if the PRICE went below $5800 its under VALUED
if the PRICE was in the $6k-$18k range. its in the 'valued range'
if the PRICE was in the $20k range. its in over valued

bitcoin is only 10% above value. but no where near over priced $18k+.
but value is subjective depending on which side..
the seller that wants $18k and the buyer that wants $6k
(value zone $6k-$18)
so $6400 is low value to seller but great value to buyer

(hope it makes sense.. i had a few drinks but tried best to keep my thoughts logical tonight)
in short: price and value are not the exact same numbers

[Xardasim]

Has anyone else developed a model for valuing Bitcoin? What number did you reach?

Context: I believe Bitcoin is currently overvalued by around $500. I have been playing with some valuation models recently (have a quant/finance background) and have been measuring relationships between wallet growth, tx info like volume and fees, and transaction velocity against social sentiment over time, which got me to a "true" value of ~$5812. This isn't exactly speculation, but it's not baseless either so I'm interested in how you guys have approached the problem.

I think the price is much higher than you said. In fact the question of how limited the value of the limited Bitcoin is to the value of unlimited paper is strange. If we can value such a simple paper the value of Bitcoin should not be in anything else in the world.

[franky1]

Context: I believe Bitcoin is currently overvalued by around $500.

i believe bitcoin is ABOVE value by $500. but not OVER priced or over valued by that amount

i feel the healthy 'consumer/retail psychology of value area' to be $6k-$18K
and that $6400 is a good healthy LOW price. which many feel is more then great value (for buyers)
where $6400 is under PRICED (for sellers)

[Oniko]

I think the real value of Bitcoin is around $ 3,000 and should grow depending on demand.

I do not trust the daily volume of Bitcoin trading and I think that the real demand for Bitcoin is less than coinmarketcap.com tells us

[franky1]

I think the real value of Bitcoin is around $ 3,000 and should grow depending on demand.

I do not trust the daily volume of Bitcoin trading and I think that the real demand for Bitcoin is less than coinmarketcap.com tells us

unless you can show numbers/ maths to back up $3k ...
im guessing.. you a buyer. where you probably think bitcoin could go upto $9k happily. but your looking and disasterously hoping to get it for 3x less. or by shouting that you think if you say its $3 you hope to cause some drama to drop the price

yea many can be seen that if they say $36k by 2020.. they probably bought at $12k and willing to wait 2 years before they want to sell.

yea many can be seen that if they say $3k.. they probably want to sell at $9k thinking its an achievable price.. but they have not bought yet so hope to buy at $3k

......

and yea daily volume is subjective. i can have just $1 and arbitrage it 10,000 times on a market to make the market look like it done $10k volume

and yea dont even look at coin market cap .. even the term market cap is funny.
the market cap does not mean there are billions of fiat stored to support the market cap. it just means coins multiplied by the price
i can make an altcoin of 5 trill coins and buy 1 coin for $1 and bam.. that coins market cap is $5trillion even though it had one purchase using just $1
i could then set up 2 accounts. sell that single coin to myself for $1 back and forth 10,000 times and create 10k volume.. all for the cost of $1
..
but with that said you can find out the base line value of a coin.. if you know what your looking for. and then using market psychology work out the value zone to know if something is under priced or over prices compared to its base value

by the way.
PoS coins have ZERO mining cost(value).. PoS PRICE is pure speculation.
there is no tangeable(no physical(hardware/electric) COST value. there is only the buyers remorse acquisition cost. which is why PoS value will always be lower than a PoW coin

[FedorIzmailov]

I believe that the price of Bitcoin is its cost of production, and it is now equal to 6-6.5 dollars

[BuyBuyBitcoin]

Why would this even matter while we are in such early days of bitcoin? It's obviously undervalued if you're investing long term and expect to have a decent return 5-10 years from now.

If you're calculating it by comparing the prices of hardware you're not coming up with the real value but the lowest possible value that keeps miners mining. Why would the lowest value be the "real" value? You don't measure the real value of a car by the cost of parts and labor needed to make it. If we did that a lamborghini would be worth $50,000 instead of 500,000.

to answer you both:

value Vs price....

bitcoin is at what most would say is at great "value" right now. because the price is ABOVE a long tested VALUE. but not much.


take many things.
businesses tend to want to markup costs vs retail price at a 3x multiple. to cover labour bills and profit
(ya some get greedy and want more.. eg coffee costs pennies for ingredients but sell for over couple dollars 10x)

so if the acquisition(cost/base) VALUE is $5800 and the PRICE is $6400. thats not even 10%(0.1x), let alone 300%(3x) so people see bitcoin as very valued and at a good low PRICE to buy

however SELLERS see it under PRICED

the 300% markup retailers, industrials and manufacturers go by is normal..
100% to pay off the acquisition COST. 100% to cater for other expenses involved and 100% profit

consumers over the decades of retail psychology are usually happy and willing to pay out at 3x of a products cost for the convenience of not having to do the hard work of manufacturing things themselves.. its been like that since retail psychology began

even in bitcoin when costs since last year were $5800 or more. people were willing to pay upto $18k(3x markup) and then the desire slipped away at $20k

same goes for most things.

if you can work out the COST of something you can generally work out the zone of desire (as long as the 'product' has utility)

EG
if the PRICE went below $5800 its under VALUED
if the PRICE was in the $6k-$18k range. its in the 'valued range'
if the PRICE was in the $20k range. its in over valued

bitcoin is only 10% above value. but no where near over priced $18k+.
but value is subjective depending on which side..
the seller that wants $18k and the buyer that wants $6k
(value zone $6k-$18)
so $6400 is low value to seller but great value to buyer

(hope it makes sense.. i had a few drinks but tried best to keep my thoughts logical tonight)
in short: price and value are not the exact same numbers

The OP is saying it is overvalued now. Value is relative to what people are willing to spend TODAY.

It was over valued last year for where bitcoin sits within the global financial markets, that doesn't mean it isn't being undervalued currently this year.

IF you believe 1 BTC = $50k 10 years from now, every purchase up to that price is an expected gain.

IF you believe 1 BTC = $0 10 years from now then every purchase is an expected loss.

IF someone is trying to daytrade bitcoin and alts then they can go and speculate all they want on how to make a profit. That isn't what bitcoin is here to do. It's storing value and it will continue to do it for many years regardless of chatter about it being overvalued currently lol.

[pooya87]

I believe Bitcoin is currently overvalued by around $500. I have been playing with some valuation models recently

i would love to actually see this "model" of yours for more information about what you actually did. but i have to say this statement of yours seems pretty baseless to me, not just because of things you considered but mostly because it is impossible to come up with a model that is that accurate within 5-7% of the price for any asset's value, let alone bitcoin which is unique in its own terms and has a much higher value than this!
in fact based on the market reaction, sentiment, the growth and adoption that bitcoin had i believe it is undervalued by at least $3000

[steampunkz]

Has anyone else developed a model for valuing Bitcoin? What number did you reach?

Context: I believe Bitcoin is currently overvalued by around $500. I have been playing with some valuation models recently (have a quant/finance background) and have been measuring relationships between wallet growth, tx info like volume and fees, and transaction velocity against social sentiment over time, which got me to a "true" value of ~$5812. This isn't exactly speculation, but it's not baseless either so I'm interested in how you guys have approached the problem.

For sure we cannot predict the stable value of BTC because of volatile in the trade market. Plus the chaos happening right now, We can wait again for another bull run I guess? For now, we ETF will be one the solution if it's accepted worldwide.

[kokobaba880]

I think that real value of bitcoin is now reached and it is traded on $6,340 which is stable for a long time and i am happy to see that bitcoin is recovered after a short bull it is happen that speculators try to make the market very unstable and then the investors hesitate so the value of bitcoin is real now and is good.

[charlotte04]

Has anyone else developed a model for valuing Bitcoin? What number did you reach?

Context: I believe Bitcoin is currently overvalued by around $500. I have been playing with some valuation models recently (have a quant/finance background) and have been measuring relationships between wallet growth, tx info like volume and fees, and transaction velocity against social sentiment over time, which got me to a "true" value of ~$5812. This isn't exactly speculation, but it's not baseless either so I'm interested in how you guys have approached the problem.

I guess Bitcoin had a huge value because people only want it to have a value and then a lot of people got hype to it, then it made Bitcoin so expensive nowadays.

[funchiestz]

Has anyone else developed a model for valuing Bitcoin? What number did you reach?

Context: I believe Bitcoin is currently overvalued by around $500. I have been playing with some valuation models recently (have a quant/finance background) and have been measuring relationships between wallet growth, tx info like volume and fees, and transaction velocity against social sentiment over time, which got me to a "true" value of ~$5812. This isn't exactly speculation, but it's not baseless either so I'm interested in how you guys have approached the problem.

It doesn't make sense to calculate it. We need to take a look at what bitcoin is. Bitcoin, decentralized and P2P money for a payment purpose. And the value is designed to balance the market conditions. So if you want to see its current value, I suggest you take a look at the crypto money exchanges. You can see the price formed by supply-demand balance in the market conditions. If you are afraid of the manipulation of the exchanges, you can have a look at the decentralized exchanges.

[bitfocus]

have you ever tried to find out fiat's real value? just try once, trust me, you will get shocked with the results.