What is Bitcoin's fundamental value?
With Bitcoin reaching new highs, there are many expectations that the price of this cryptocurrency will reach $100,000 or more.
Given the recent rise in the price of this currency, and reaching new levels, this rise is expected to continue.
These statistics are usually based on tracking the pattern of “graphs” and “technological analysis” of the price of this currency, as well as on the expectations of some interested people.
How is the intrinsic value of a currency calculated?
When talking about the intrinsic value of money, we can say that its value is based on the return (or cash flow) that is generated by the asset.
Example: The main value of the apple tree for the capitalist is not in the tree itself, but in the amount of apples that this tree produces.
The same applies to residential real estate, the principal value of which depends on the amount of rent that the owner earns.
It can be said that the primary value of any currency, whether it is fiat currency or cryptocurrency, lies in being a reliable and acceptable unit of exchange.
In the past, coins made of gold and silver had an essential value by smelting them and obtaining their precious metals.
This is no longer possible with paper money, whose value depends only on the trust of the people who approve it at face value.
In September, analysts at Britain's Standard Chartered Bank predicted that bitcoin could peak at $100,000 by the end of 2021.
“As cash, Bitcoin could become the leading peer-to-peer settlement technology for the unbanked in the cashless world of the future,” said Jeffrey Kendrick, Head of Crypto Research Group at the bank (former Australian Treasury authorities).
Cryptocurrencies that can maintain a secure value are likely to become settlement instruments.