Published on September 16th, 2017 | by bitcoin0
Reasons Bitcoin May Sell for Triple Its Real Value
It’s been a whipsaw week for bitcoin and other digital currencies, leaving investors struggling to decipher bitcoin’s true value.
Dan Davies, senior research adviser at Frontline Analysts, argued there’s no point in attempting to value bitcoin as if it were just another type of security.
But the BTC/USD
exchange rate is entirely determined by speculative portfolio capital flows right now, he said, leaving it difficult to assign fair value.
So, the long-term fundamental value of bitcoin equals the long-term value of transactions that will be carried out in bitcoin divided by 210 million (21 million bitcoins multiplied by velocity).
“The fact that bitcoin has increased its relevance over the past several years and the number of people and businesses using it is increasing suggests that we should update our assumptions about its viability,” Davies said, adding “though I still would not trade, nor invest in it as I cannot predict capital flows in and out of bitcoin.”
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