Bitcoin Valuation Discussion
Since my last update a week ago, my bitcoin profits passed the point of being enough for a Prius ...
And are now up to an Audi
Whenever the price of bitcoin spikes, there seem to be a fresh batch of articles written about how high the price may continue to rise? So that's the focus of the latest news today ...
Some of the coverage may not be the sorts that people may want to see? Will try to start off with an article that's quite lovely - it's a personal story written by a tech reporter for the BBC, whose $87 hodl of bitcoin is now worth $1713
Really enjoyed it because he seems to be having fun with his bitcoin, which has continued to rise in price in spite of all the naysayers warning of an impending crashes - yet he still leaves open the possibility of there someday being a time when it may seem best to sell, and does it in kind of a light-hearted way?
http://www.bbc.com/news/technology-42138370
1. Market Cap
Most of the articles seemed to try to figure out how how high the price of bitcoin may rise by comparing its market cap to other assets?
This is what's showing for bitcoin's current market cap on World Coin Index - is this the correct amount?
a) Bulls
Some say there's still quite a bit of room for growth
i. Coin Telegraph - https://cointelegraph.com/news/300-b...nt-be-a-bubble
Coin Telegraph points out that it would just take a tiny bit of peoples' stock or gold money to give bitcoin a market cap of $1tril ...
ii. Coin Bay - https://coinbay.in/bitcoin-could-eas...018-novogratz/
There's also a hedge fund manager who sees bitcoin reaching $40k by the end of next year, because of all the money available to invest and the limited supply ...
iii. Bloomberg Markets - https://www.bloomberg.com/gadfly/art...a-while-longer
Bloomberg sees a bubble bursting at some point, but not for a while ...
b) Bears
It looks like the naysayers only 'feel' like the price of bitcoin 'shouldn't' be as high as it is?
i. Guardian - https://www.theguardian.com/technolo...unds-plough-in
The Guardian notes that the market cap of bitcoin is now larger than Disney and McDonald's ...
ii. CNBC - notes the market cap of bitcoin is larger than MasterCard - https://www.cnbc.com/2017/11/27/for-...real-time.html
iii. ABC Australia - notes the market cap of bitcoin is larger than Walmart - http://www.abc.net.au/news/2017-11-2...d-high/9200106
iv. WSJ - https://www.wsj.com/articles/why-bit...ers-1507515361
WSJ says approval of an ETF would increase demand for bitcoin, but because of that, approval becomes more unlikely as prices rise because governments will want to limit the effects of a potential bubble burst ...
2. Number of Users
a) Bulls
i. Guardian - https://www.theguardian.com/technolo...unds-plough-in
The Guardian notes that only a fraction of the population currently has a crypto waller?
b) Bears
ii. CNBC - https://www.cnbc.com/2017/11/27/buy-...ble-fears.html
Although CNBC says the number of recreationals looking to get into bitcoin is on the rise, which is supposed to be a sign that a potential bubble may be maturing?
3. Utility
Guess this is up to each person to decide how to take these - could see some people wanting to dismiss them for being so fearful, but maybe some people may see something to be heeded in their words of caution?
b) Bears
i. Telegraph - http://www.telegraph.co.uk/technolog...ime-bit-pound/
Kind of hard to argue with the baguette/bugatti comment
ii. Economist - https://www.economist.com/blogs/butt...-fool-theory-0
The Economist warns that it may not be possible for everybody to realize their profits if there does wind up being a bubble burst, unless one of the first out the door ...
Here's some graphs of assets with underlying value that wound up bubbling up and down, from before:
Quote:
Originally Posted by TrustySam
The notes in the next graph are from the Prof. who came up with the theory/graph of the bubble phenomena - guess gold and silver post-crash didn't drop down to zero like in the theoretical model, because they have actual worth and demand from users as a product?
Along with a couple of new ones:
Some of my investments this year didn't go well - wound up investing a little too much in speculative stocks, where there were lots of professional traders in the pool ... then missed signals that the market had taken a turn when not paying close enough attention and was a day late and a dollar short, etc
Was hoping to keep in mind a potential exit point before buying any bitcoin - and then kind of forgot to keep track because bitcoin's been doing so well
SUMMARY: Maybe it wouldn't hurt to try and keep track of how many fresh new investors may be looking to start investing in bitcoin, to be sure that bitcoin's price will for sure continue to rise?
With that new futures exchange scheduled to go online in the second week of December, does it seem like the price of bitcoin could rise to US$12k by the end of the year?
Last edited by TrustySam; 11-28-2017 at 02:23 AM.