How to Value Bitcoin? People Psychology

Dear Reader,

Currently Bitcoin is worth 33 630.10 USD. Since Bitcoin does not have underlying cash flows, Bitcoin cannot be valued with the three main company valuation methods Discounted Cash Flows, Comparables and Net Assets method.

Bitcoin's valuation depends on the public's adoption of Bitcoin as money, that is store of value, means of exchange and unit of account. Both the public acceptance and the regulators', central banks and financial supervisors and ultimately governments, benevolence on Bitcoin determine the value of Bitcoin.

In a post from last year I forecasted that Bitcoin's price could rise above 100 000 USD. Bitcoin recently rose above 40 000 USD. I think it would take another 2 to 3 years before Bitcoin rises to above 100 000 USD.

Bitcoin saves effort, time and money for people, key attributes for a well-selling product. I forecast Bitcoin would get even greater adoption and Bitcoin's value would continue rising. Once the price of Bitcoin stabilizes, that is it becomes less volatile people would start to purchase more goods and use Bitcoin more to transfer money or value. New stable coins issued by major companies and central banks could contribute greatly to that.

In short, in the mid-term Bitcoin is undervalued. Even if the Federal Reserve raises interest rate levels and stocks fall a lot, Bitcoin could be less affected because in it valuation interest rate play less of a role.

Disclaimer: The blogposts and comments on this blog and posts on social networks(Twitter, LinkedIn, Facebook etc.) are not investment recommendation, are provided solely for informational purposes, and do not constitute an offer or solicitation to buy or sell any securities. The opinions expressed on the blog are Petar Posledovich's. Petar Posledovich does not guarantee the accuracy of the information presented on this blog and social networks. The information presented is "as is".

Petar Vladimirov Posledovich is not liable for any investment losses incurred by reading and interpreting blogposts on this blog and posts on social networks.

Conflicts of interest: I may possess some of the securities, currencies or their derivatives mentioned in the blogpost and posts on social networks(Twitter, LinkedIn etc.)!

Respectfully yours,

Petar Posledovich