Would crypto gain full intrinsic value?

[kryptqnick]

With the high level of volatility and constant fluctuation in market capitalization on crypto currencies would there ever come a time we would trade crypto based on the value it has in it's self and not in exchange for fiat currency. Many countries has now adopted crypto as mode of payment but we are still faced with the issues of price irregularities. If we decide to adopt crypto fully as a global legal tender how do we deal with this price fluctuation.

This is the edge fiat and centralized currencies have over crypto and this has made so many shy away from doing legal business transaction using some crypto most especially during bear market. Can this issue get a remedy?

Money itself doesn't really have value, not since fiat was created. Its value comes from trust in it as a reliable medium of exchange, and as for Bitcoin's value being measured in fiat, I think it's simply done for reference purposes. What it really tells us is the coin's purchasing power, and lots of local fiats are also weighed similarly against the dollar or other major currency to determine its stance. Regarding the fact that most people sell Bitcoin for fiat to actually use their profits, I think it's simply due to the lack of options of spending Bitcoin directly, and it doesn't mean that these people don't think that Bitcoin is indeed worth $60k or anything.

[fiulpro]

With the high level of volatility and constant fluctuation in market capitalization on crypto currencies would there ever come a time we would trade crypto based on the value it has in it's self and not in exchange for fiat currency. Many countries has now adopted crypto as mode of payment but we are still faced with the issues of price irregularities. If we decide to adopt crypto fully as a global legal tender how do we deal with this price fluctuation.

This is the edge fiat and centralized currencies have over crypto and this has made so many shy away from doing legal business transaction using some crypto most especially during bear market. Can this issue get a remedy?

When we talk about cryptocurrencies, we have to understand the fact that there are some like bitcoins and Etherum and these cryptos are already integrated with some of the countries on a very deeper basis and in come countries it's also legal tender therefore they are very close to getting an intrinsic value settled down. I do think you have to also address the fact that:
Volatility is decreasing day by day, like before we could have been fluctuating around 5000$ or so but right now if something like that happened the price would bounce back up faster than anything, there are people waiting around to buy at the right time.

Therefore the more it gets famous, the more legal it gets and more other things gets integrated with it, it would attain a faux intrinsic value, for sure.

The fluctuations would decrease for sure if it gets recognize all around the world, if bitcoins and other cryptocurrencies starts becoming a legal tender, it would be more or so like gold but more volatile, but still have enough value to be taken into consideration.

[beerlover]

We have already seen it that most countries would prefer to have their own digital currencies that are issued by their central banks. So far it has only been El Salvador that has decided to adopt Bitcoin as a legal tender. We are not sure if other countries are going to do the same thing, and by the way that wasn’t the reason why we have Bitcoin today, so I am not expecting it to become illegal tender in anymore country.

If Bitcoin should become a legal tender in every country around the world, then the government will be prompted to attempt a total control over it, which wouldn’t seem like a nice thing for them to do. Bitcoin was created to be a currency on his own that would be used by people who needs freedom and privacy.  So, I don’t get why some of you are still talking about it becoming a legal tender in countries, if you’re not OK with the volatility of crypto currencies, then I will advise you to just take a break.

[AicecreaME]

I still don't understand what do people mean,when they say "intrinsic value"?
The value/price of Bitcoin is determined by supply and demand,plus the costs of mining.
The intrinsic value of Bitcoin is supposed to be the cost of mining one BTC.The supply and demand factor determines the price of one BTC.
The intrinsic value of BTC has nothing to do with the price of BTC being measured in dollars or euro.
The price volatility of Bitcoin will never change.If you hate price volatility and fluctuation,then just use stablecoins or some not-so-volatile cryptocurrency like ethereum or ripple.
Bitcoin/crypto will never be adopted as a "global legal tender" and that's OK.

This one of the sensible answers I have read here. Bitcoin gets its price value depending on the market demand. There are times that the supply is high and demand is low, which is the usual season whereas bitcoin has a low price position. And there are times that the supply is low and the demand is high, giving a high price value to bitcoin. It's just a basic law of supply and demand, which I think most of you are already aware of, that dictates what would be the price trend of btc. But of course, there are also other factors that can affect the chart such as the news about its legality, opinion of a popular and reputable personality, etc.

The price of bitcoin in equivalent to dollars or euro is actually just normal. You just have to have a conversion of something into your local currency to fully utilize it. In this case, the usual conversion of btc is dollar because it is the global currency, and in addition it has become a coin as well in several trading and investing platforms.

Regarding with never ending question about bitcoin to become a global currency, my answer would still be the same. No, bitcoin or any other coin is impossible to be the world's currency. Why do you think the government and the central organization allow such speculative asset to take over? When they could just print money whenever they want and deem necessary? In addition, surely the countries all over the world won't ditch their local currency unless they have no other choice because of economy collapse.

[Pejoh Asu]

Crypto users continue to increase and when it has reached more than $140 billion daily transactions, this proves that crypto has a strong influence and of course the intrinsic value of crypto is the ease of transacting at low costs, I'm sure more and more countries will make crypto a national asset.

[bitgolden]

Crypto users continue to increase and when it has reached more than $140 billion daily transactions, this proves that crypto has a strong influence and of course the intrinsic value of crypto is the ease of transacting at low costs, I'm sure more and more countries will make crypto a national asset.

In my understanding, the total worth of daily transactions may not get us the clear picture but if we are able to find out how many transactions are happening everyday might lead us to figure out how intensively we are moving forward to influence in our nation's economy which might enforce to government to plan up like you have mentioned here.

Now few more countries will follow El Salvador and then some of them will plan up to have bitcoin into their reserve along with gold. Still, like OP emphasized for that we must have bitcoin into relatively stable price ranges. I agree with OP that until being volatile, bitcoin may not be qualified to be used as national reserve.

[Betwrong]

Crypto users continue to increase and when it has reached more than $140 billion daily transactions, this proves that crypto has a strong influence and of course the intrinsic value of crypto is the ease of transacting at low costs, I'm sure more and more countries will make crypto a national asset.

In my understanding, the total worth of daily transactions may not get us the clear picture but if we are able to find out how many transactions are happening everyday might lead us to figure out how intensively we are moving forward to influence in our nation's economy which might enforce to government to plan up like you have mentioned here.

Now few more countries will follow El Salvador and then some of them will plan up to have bitcoin into their reserve along with gold. Still, like OP emphasized for that we must have bitcoin into relatively stable price ranges. I agree with OP that until being volatile, bitcoin may not be qualified to be used as national reserve.

And yet, although BTC is still very volatile, they made it a legal tender in El Salvador. Now they are harnessing volcanoes to power Bitcoin mining; buying BTC at the deep, like they did just recently purchasing $25 million worth of BTC at current prices(and they consider it deep! I'm a big fan of these guys.)

I think other countries should learn from El Salvador and start the adoption process instead of waiting for BTC to become a stable coin. Chances are it can take forever.

[Snappycoco]

Crypto users continue to increase and when it has reached more than $140 billion daily transactions, this proves that crypto has a strong influence and of course the intrinsic value of crypto is the ease of transacting at low costs, I'm sure more and more countries will make crypto a national asset.

Yeah agreed. Also lots of markets are now being tapped. Artist are now into it through NFT's. Gamers are now into it because of Play-to-earn cryptocurrency games. Aside from decentralised finance that still blooms year by year, lots are happening that getting crypto into far more audiences that could lead to total dominance in monetary system.

[justdimin]

With the high level of volatility and constant fluctuation in market capitalization on crypto currencies would there ever come a time we would trade crypto based on the value it has in it's self and not in exchange for fiat currency. Many countries has now adopted crypto as mode of payment but we are still faced with the issues of price irregularities. If we decide to adopt crypto fully as a global legal tender how do we deal with this price fluctuation.

What we need as data is how many people are using it. The adoption is based on how many people and not how much money. If there are 100 rich people doing 140 billion, that won't be same as 8 billion people doing 20 bucks each or something like that. Which is why I believe that we should be looking at how many people are using it. That is not really the same thing as how many addresses, one person could have multiple address and I have a lot of them just myself as well. Which is why I believe that we should basically try to find the crypto population.

[wxa7115]

The stability of fiat is less interesting than the volatility of Bitcoin.

I think Bitcoin wouldn't be as popular as it is right now if volatility did not become part of it. The unpredictable and sometimes sudden rise and fall of the price of Bitcoin became the most attractive characteristic of Bitcoin itself to a lot of people. The price of which was that Bitcoin became less and less a currency and more a speculative asset. But I guess that's the one that mainly pushes the price of Bitcoin up. Even solid Bitcoin enthusiasts and advocates are now talking of Bitcoin's price more often.

That's the reason why crypto became an asset and not a currency. I mean sure there are many people who spend crypto daily, and there are many shops that accept it as well but that "many" is compared to how many we had in the past. If we compare it to how many accept fiat, well all of them do, so it is really not even something we could compare.

This is why I believe that crypto became an investment, because people realized that fiat is stable and will not make you too much profit while crypto is volatile and yes there is a chance you may lose a lot but there is also a chance that you may earn so much money that way, which is what I believe happened with crypto at the time as well. We should hope that bitcoin stays like this if we want to, because in the end if we stop being volatile then people will stop investing as well, more people will use it but that won't be enough.

It is kind of odd but the reason people are not using bitcoin for their everyday transactions and instead keep their bitcoin and prefer to use their fiat is simply because bitcoin is that superior to fiat as a currency.

It may seem counter-intuitive but it is not, if you give people a choice between spending a form of money that losses purchasing power and one that gains it, which one do you think they will spend and which one will they keep? It is obvious people will spend their fiat and keep their bitcoin, which is precisely what we are seeing happening right now.

[LUCKMCFLY]

Crypto users continue to increase and when it has reached more than $140 billion daily transactions, this proves that crypto has a strong influence and of course the intrinsic value of crypto is the ease of transacting at low costs, I'm sure more and more countries will make crypto a national asset.

Yeah agreed. Also lots of markets are now being tapped. Artist are now into it through NFT's. Gamers are now into it because of Play-to-earn cryptocurrency games. Aside from decentralised finance that still blooms year by year, lots are happening that getting crypto into far more audiences that could lead to total dominance in monetary system.

What happens is that to give a value, it is something very subjective, in terms of appraisals this is usually seen as an appraisal of firms that is very difficult to do, because a value must be taken into account (which is calculated based on the offer- demand on average with the value that the devs can give in the project) from there get the total to determine how much it can be, and that has to be accepted in almost everyone, and the maximum that can be given is that, just a security because the price is determined by supply and demand, the market is very volatile.

In NFT games it is something like luck, as it happened in the Squid's NFT, in 5 minutes it reached zero, it is very difficult to predict that this would happen.

[Semar Mesem]

The price is determined by stock and demand, bitcoin has 2 things that make bitcoin valuable, bitcoin stock is fixed and the number of users or high demand makes prices continue to skyrocket and this is the basis for bitcoin's value.

[mu_enrico]

^S2F fanboy

Anyway, the concept of "intrinsic value" is outdated. What does it mean? The value in itself? The labor? The cost?
Even in stocks, the concept is flawed since it's the present value of all future cash flows. It means that you must forecast the firm future cash flows. Except you are Nostradamus, you just can't calculate it correctly. In the end, it's more of your belief of the firm's future cash flows.

Belief is a nice segue to the subjective theory of value. Basically, scarcity and utility are the best predictor for valuation.

[jostorres]

^S2F fanboy

Anyway, the concept of "intrinsic value" is outdated. What does it mean? The value in itself? The labor? The cost?
Even in stocks, the concept is flawed since it's the present value of all future cash flows. It means that you must forecast the firm future cash flows. Except you are Nostradamus, you just can't calculate it correctly. In the end, it's more of your belief of the firm's future cash flows.

Belief is a nice segue to the subjective theory of value. Basically, scarcity and utility are the best predictor for valuation.

It is not "outdated", it is just not something that works in most places and in regards to most things. For example if you checked Tesla for instrinct value only then you would not buy it, but then you lost so much profit from not buying it. However there are still a lot of insurance companies and banks that could be bought based on that and you would make a lot of profit from it. Same goes for many other things, you could make a lot of profit if you want to, and that is not going to really change the fact that IV works in some cases and not working in other cases.

So, you need to find a way to understand what it works on and what it doesn't work on. Obviously it is "outdated" like you said in things like crypto, if you are looking for Bitcoins IV then you are going to not end up with something that is profitable, because it doesn't really have any at all.

[Coyster]

With the high level of volatility and constant fluctuation in market capitalization on crypto currencies would there ever come a time we would trade crypto based on the value it has in it's self and not in exchange for fiat currency.

I do not really know for cryptocurrencies in general cause there are so many of them, but the one I trust and believe in its network is Bitcoin and when I talk about crypto, more often than not, I talk about it alone, I believe Bitcoin will continue to grow, as the years keeps coming, until it gets to mass adoption, and I think at that very time it's very possible that we'll see a lesser case of volatility than what we're currently experiencing at the moment.

Having said that, tbh, I don't expect volatility to completely go away, but we could get to a time when it becomes lesser, but even if it doesn't, it's not too much of a problem if you ask me, as long as its users have freedom of their funds, are their own bank and the investors can get ROI, then there is no problem that needs to be solved.

[adzino]

With the high level of volatility and constant fluctuation in market capitalization on crypto currencies would there ever come a time we would trade crypto based on the value it has in it's self and not in exchange for fiat currency. Many countries has now adopted crypto as mode of payment but we are still faced with the issues of price irregularities. If we decide to adopt crypto fully as a global legal tender how do we deal with this price fluctuation.

Does crypto really to have a "full intrinsic value" that you are talking about? I don't see any issue with crypto being traded and valued in fiat currency. The volatility isn't because of this. As more people start using and accepting bitcoin, the less volatile it will eventually become. We can't deal with the price fluctuation. No one controls this fluctuation. Just give it few more years (or even decades) and you will see that the price isn't as volatile as it is.

This is the edge fiat and centralized currencies have over crypto and this has made so many shy away from doing legal business transaction using some crypto most especially during bear market. Can this issue get a remedy?

You mean the volatility is making business not accept crypto? Well then they can use crypto gateways that will instantly convert their crypto to fiat currency.

[Lotus]

The volatility isn't because of this.

How is that? If crypto was used to directly buy goods and services, then there would be little pressure on it to be volatile!

[Betwrong]

^S2F fanboy

Anyway, the concept of "intrinsic value" is outdated. What does it mean? The value in itself? The labor? The cost?
Even in stocks, the concept is flawed since it's the present value of all future cash flows. It means that you must forecast the firm future cash flows. Except you are Nostradamus, you just can't calculate it correctly. In the end, it's more of your belief of the firm's future cash flows.

Belief is a nice segue to the subjective theory of value. Basically, scarcity and utility are the best predictor for valuation.

I like how you put it. Imo those are two main factors too. But regarding to Bitcoin, although utility is there and scarcity is definitely there too,  it is still so hard, almost impossible, I'd say, to say even roughly, is it trading below its "intrinsic value" right now, for example.

[Ozero]

With the high level of volatility and constant fluctuation in market capitalization on crypto currencies would there ever come a time we would trade crypto based on the value it has in it's self and not in exchange for fiat currency. Many countries has now adopted crypto as mode of payment but we are still faced with the issues of price irregularities. If we decide to adopt crypto fully as a global legal tender how do we deal with this price fluctuation.

This is the edge fiat and centralized currencies have over crypto and this has made so many shy away from doing legal business transaction using some crypto most especially during bear market. Can this issue get a remedy?

We can only judge the value of a cryptocurrency by comparing it with the price of fiat. There are no other methods for assessing value in our world. When there was no fiat, there was exchange in kind, but it was found to be cumbersome and ineffective.
There will always be price volatility in cryptocurrency. This is a feature of this market and cannot be eliminated in any way. Therefore, we say that cryptocurrency can only exist alongside fiat. On the other hand, states will not allow their national money to disappear.

[yananda]

that's the importance of liquidity in each new project to make it more valuable, maybe many ignore or even don't care but that's a start that makes crypto a special concern at this time