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MarkRoberts
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What is really the value of Bitcoin? How do these analysts derive Bitcoin's price predictions?

Thu Jun 17, 2021 12:07 pm

The price is purely supply and demand. Its quoted in dollars because that's the most popular unit of account.

You can also measure Bitcoin's price in ounces of gold or barrels of oil. But those measurements are also using dollars as a conversion step.

What's interesting about BTC is the supply is known. Its known exactly today and it can be predicted with great accuracy into eternity.

Most analyst price targets are based on comparisons to similar assets. If 1 BTC = $400k then Bitcoin has a market cap comparable to gold.

There are also models like Stock-to-Flow which gives a valuation based on scarcity and production rate.

Other models rely on past cycles in Bitcoin price. In the past, the peak of a cycle is 10x or more the peak of the last cycle. People extrapolate these statistics to predict the future.


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CryptoStar19
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Re: What is really the value of Bitcoin? How do these analysts derive Bitcoin's price predictions?

Mon Jun 21, 2021 5:17 pm

All valid points. Just wanted to add that bitcoin's value really doesn't have a limit on the upside... yes there are bold predictions for this cycle or for the next 10 years, but the truth is that bitcoin is still very early in terms of adoption and nothing really stands in it's way so we are going to see these prices reach levels beyond our wildest dreams in the years to come.

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