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How to scientifically value the future price of Bitcoin? As Bitcoin returns to $18,000, people who pay attention to Bitcoin are getting agitated again. There are too many questions about Bitcoin, and the biggest question is the future price of Bitcoin. Will Bitcoin reach a new high? Will Bitcoin have another big bull market? How much will the price of Bitcoin rise this time? Can you still buy Bitcoin now? Take these questions and read the detailed introduction below!

How to scientifically value the future price of Bitcoin?

In fact, the core issue is a valuation issue. When buying and selling things, everyone has a scale in their hearts. Although this scale always fails, it can comfort and give courage. But Bitcoin makes people unable to find a valuation system and can't make a move. If you buy it, you don't have a clear mind, and if you don't buy it, you feel uncomfortable watching it rise every day.

There is no good way to value Bitcoin. The most effective way is "belief", 1BTC=1BTC. Of course, there are some relative valuation methods:

1. Cost method

Bitcoin is produced by mining machines. The mining cost of each Bitcoin is affected by factors such as mining machine equipment, electricity costs, and the amount of mining computing power involved. At present, the mining cost of each Bitcoin is generally more than 60,000 RMB. But I think it is meaningless to calculate the valuation in this way, because the price of Bitcoin is determined by demand, not by cost. From a causal point of view, the mining cost is the result of the Bitcoin price, not the cause of the Bitcoin price. If the price of Bitcoin falls and mining becomes unprofitable, some people will withdraw from mining, and the mining income will rise. This is a dynamic equilibrium process.

2. Treat Bitcoin as an Internet company and do relative valuation

If Bitcoin is regarded as a company, holding Bitcoin is equivalent to holding its shares and using its products. He has a product that has been operating stably for 10 years, which belongs to financial technology innovation. Because the product is innovative enough, it has driven an industry. He has tens of millions of users (Coinbase claims to serve 20 million users), and most of them are loyal and faithful users. There are more than 10,000 Bitcoin ATMs in the world and they are growing. This company has no employees and no fixed costs. All operating costs are voluntarily contributed by users. If such a company goes public, how much do you think it should be worth?

JD.com (e-commerce), which serves 360 million users, currently has a market value of more than 130 billion US dollars;

Facebook (social), which serves 3 billion users, currently has a market value of more than 770 billion US dollars;

Ant Financial (financial technology), which almost went public, serves 1 billion people and is valued at 320 billion US dollars.

Based on the price of 18,000 US dollars, the current market value of Bitcoin is more than 330 billion US dollars. Do you think it is overvalued or undervalued?

3. Consider Bitcoin as a safe-haven asset and value it relative to gold

Currently, more and more people regard Bitcoin as digital gold and it is expected to replace gold. The current stock of gold is about 200,000 tons, and it grows by 1.5% to 2% every year (inflation). There are currently 18.5 million Bitcoins in stock, capped at 21 million, and currently grows by 1.66% every year (inflation), and the output is halved every four years.

According to the current gold price of $65 per gram, if the market value of Bitcoin catches up with gold, each Bitcoin will be worth about $700,000; if the market value of Bitcoin reaches 1/10 of gold, each Bitcoin will be worth about $70,000.

4. Consider Bitcoin as a currency and value it relative to the currency circulation

Although Bitcoin is not legal tender and is rarely used for commodity pricing and settlement, its performance in payment, value storage and other fields has far exceeded that of some legal tenders, so it can be assumed that it is a non-sovereign currency and valued in comparison with the circulation of other currencies.

When the price of Bitcoin is $10,000, the market value of Bitcoin has exceeded the circulation of the Korean won;

When the price of Bitcoin is $14,000, the market value of Bitcoin has exceeded the circulation of the Russian ruble;

When the price of Bitcoin is $18,000, the market value of Bitcoin has exceeded the circulation of the Canadian currency;

When the price of Bitcoin is $250,000, the market value of Bitcoin will exceed the circulation of the Chinese currency.

5. Valuation of the scarcity indicator S2F model

The S2F indicator was released by the author plan B on the content platform Medium. S2F means stock to flow, which is the ratio of existing reserves to annual production. The result can be understood as the time it takes to produce existing reserves according to the current annual output. The larger the value, the higher the scarcity. For example, the S2F of gold is 62, which means it will take 62 years to produce the current gold reserves.

According to the S2F model, the price of Bitcoin in 2021 is predicted to be 100,000 to 250,000 US dollars. Finally, how to value Bitcoin depends on what you regard it as and your confidence in it.