Introduction
In an interesting discussion with another user ( @pedrombraz ) I stated that I think Bitcoin at its current price of around 2.5K USD is undervalued.
I thought this would be an interesting topic to discuss.
Before getting on to my personal thoughts on this, I have created a twitter poll to help gauge other people's opinions in addition to this post:
Please click the link and vote - it is only for 24 hours.
Right now it seems most people voting think that BTC is undervalued and should be worth more than $5K USD.
My Thoughts
Here are my main thoughts on why I think the current price is low. Obviously these are subjective and you may disagree with them.
1. Security:
Despite it's problems bitcoin is the most secure blockchain. That makes it harder to attack and more trustworthy since it is almost impossible (or getting to be) to carry out attacks which falsify transactions, double spending etc.2. Real world effort:
A considerable amount of real world money, energy and infrastructure goes into mining it. In a sense that creates a certain base level of value..jpg)
3. Branding:
Bitcoin is arguably the only cryptocurrency "brand" that has recognition in the real world.4. Community:
Bitcoin probably has the largest community backing - you would be hard pressed to find someone who is into cryptocurrencies who doesn't support it.5. Segwit 2X:
It seems likely that Segwit 2X will now pass. This won't solve the scaling issues forever but will help.6. Gateway to the Crypto World:
Bitcoin is the primary gateway to all other cryptocurrency tokens and investments - and it will likely stay that way for some time. If you have no other cryptocurrency and want to buy "Token X" you will in most cases need to buy Bitcoin first.7. Scarcity Without Some of the Disadvantages:
Bitcoin is very scarce compared to most other cryptocurrencies and monetary systems. Yes you can divide it up into tiny units without problems but that does not take account of how people psychologically deal with numbers.Further even at it's slowest, bitcoin is infinitely easier and faster to transport than commodities like gold.
You can also secure it and hide it more easily than physical money or gold - reducing (but not eliminating) the risk of being robbed.
Conclusion
It is very subjective as to whether you believe that the current valuation takes these factors into account or not (even assuming you do agree with them).
Overall I think Bitcoin will be around for the foreseeable future.
From that perspective and with the limited total tokens (21m) simple demand will mean that valuations in the millions of dollars per token are feasible eventually.
That is pure speculation on my part but I believe that it is within the bounds of possibility and given that it is so, it should have an impact on the current price too.
Feel free to share your own thoughts below.
Thank you for reading
BTC is King, and will always be :)
I think so too.
Unless a government or corporate body decide to support a new crypto, which is always possible. I think given enough traffic/marketing (or just straight power through financial backing or connections) anything can be overturned or assets such as oil/gold/etc. could be moved up/down the lists rather easily, given enough effort. What are the chances of such an event taking place? Very slim. But let's say a future corrupt state decides to fund their own coin or support something that helps with their business, and other corrupt nearby states also jump on the train.. boom, BTC is knocked down a place. It'd have to be GIANT momentum, but it's certainly not impossible for it to be moved down (at least for a temporary bit).
Of course nothing is impossible in this regard.
Great article! I find myself also in the group who thinks Bitcoin will be worth more than 5k, I think even that there is a chance it will be worth 10k by the end of this year...
But... seeing that the majority thinks this makes me a bit uneasy about this... hmmm....
I also think that as Bitcoin rises the other second-Tier currencies will rise even faster... (the same holds true if it falls, they will fall faster, but as the market seems to be poised to go up, btc dominance might fall)...
Dominance will definitely fall as the ecosystem expands and more people invest.
I agree with most of your points, but I am concerned about this one:
"5. Segwit 2X:
It seems likely that Segwit 2X will now pass. This won't solve the scaling issues forever but will help."
I just wrote an article on why, which I'll link below (apologies for the self-promotion), but to paraphrase, SegWit2x will not do much to help scaling or fees compared to even a modest block size increase (which Satoshi expressly suggested), it may be difficult or impossible to remove later, and the real intent of it is to "create off-chain transactions" which literally violate the Bitcoin white paper.
https://steemit.com/bitcoin/@lexiconical/seg-wit-is-a-trojan-horse-bitcoin-scaling-debate-explained
Here's some r/btc threads relevant on scaling:
This thread notes skepticism we'll even see the 2x part, which I share to some degree:
~~~ embed:btc/comments/6lcmia/so_is_the_2x_part_of_segwit_2x_going_to_happen/ reddit metadata:fGJ0Y3xodHRwczovL3d3dy5yZWRkaXQuY29tL3IvYnRjL2NvbW1lbnRzLzZsY21pYS9zb19pc190aGVfMnhfcGFydF9vZl9zZWd3aXRfMnhfZ29pbmdfdG9faGFwcGVuL3w= ~~~
Interesting. Thanks I will check out those links!
I am invested in bitcoin because I think it will go up in value but in saying that, I cant agree with all your points
If this is your impression you may need to leave the echo chamber there are a lot of people and a lot of money invested in cryptocurrencies that are not 'believers' in bitcoin.
Also I would highly question the value of a poll of your twitter followers as they are likely invested in bitcoin and therefore want to believe it is worth a lot more as they want to make money.
Your other points are still valid though and I tend to agree with them
Based on what though - your own echo chamber? I never said it was a an unbiased sample.
They are all valid whether you agree or not.
My own echo chamber? Where some people believe in bitcoin and some don't?
You don't seem to understand the concept. We all tend to be surrounded by people who support our opinions to a greater or lesser degree. I find it strange that you would say that my twitter feed is an echo chamber but be shocked if I suggest the same to you.
You stated that it would be hard to find someone that was into cryptocurrencies that didn't support bitcoin. Only way I could see someone believing that is if they were in an echo camber.
The only view I have expressed is that, there are people of many views, but that seems to be enough info for you to conclude that i am in an echo chamber.
Which is based on what though? Your own experiences which may be skewed and biased in a similar way.
In the same way as you can only see someone believing it being in an echo chamber the opposite could also be true.
In fact I can't think of a single person I have encountered in the cryptocurrency world that is anti-bitcoin - the idea of it is somewhat hypocritical.
That suggests to me that it is a tiny niche - I can't prove it, but I doubt you can prove the opposite either.
It also did not escape my attention that you altered your original comment - I'm not sure why you would bother.
Anyway it seems trying to explain this idea to you (which you actually brought up) is a fruitless pursuit so this is my final attempt.
I would rather not spend time explaining the meaning of what you said back to you.
Life is too short for that.
I i edited 2 typos . Didn't change any meaning.
While proving your point would be difficult to prove mine you could just go on r/ethtrader r/ripple r/dash, here on steemit or a lot of other places that none bitcoin cryptos are discussed. You will find while a lot support bitcoin too a large number in each community do not. I am amazed you can't see that.
Your statement of 'it would be hard to find someone that doesn't support x' is especially strange as i think you could replace x with anything and it could be disproven in 5 mins with a few Google searches.
:)
Fuck. You're recruiting my adrenaline glands right there.
bitcoi needs some time to ride the waves. Its currently looking at mass adoption so there will be no going back for btc.
Dono how the soft and hard fork arw going to affect the coin in the future though.
Cheers for the article and much love from me friend :)
Thank you!
I agree, bitcoin is really the so called "branding" of cryptocurrency, we can see most of the alcoins prices will be affected by bitcoin's. However, I reckon LTC is also way undervalued, I believe the price will go way more than double of the current price in the near future. Well, the price of ltc goes really dramtic these two days.
BitCoin is first crypto that comes in mind.
If you tell people who are not into cryptocurrencies about dash or steem curencies they think it is some scam, but bitcoin is brand everyone knows even people who are not in cryptocurencies.
It can easy go above 10 000 USD
I agree as well, to adapt and accept a different form of payment is difficult - the ability to just accept 1 cryptocurrency will be a huge leap - and admittedly I doubt many of the baby-boomer generation will make the leap. Bitcoin has the potential to get to 10K. To see that, we will need to see government acceptance, etc.
I think most governments are starting to realise they are better getting on board rather than getting left out.
I agree I think of LTC as being Bitcoin's little brother.
Don't forget the negatives.... I notice you didn't mention FEEs. They are slowly increasing by design and eventually it'll cost more to transfer through bitcoin than fiat. And top miners will work to keep it this way.
That's why I put more stake in other coins that have zero fees. I'm sure bitcoin will rise from where it is today, but I don't think it has the infrastructure match other coins.
The negatives will be sorted out long term. Fees can be adjusted.
I couldn't agree more! Bitcoin is gold 2.0 :)
Good news from Germany: The largest food delivery service in Germany now accepts Bitcoin!
Excellent news!
GREAT NEWS!
UPVOTED AND RESTEEMED
Thanks!
Bitcoin is top dog!
To the moon!
Solid points, you got my upvote!
Thank you!
BTC only slumped a little because of the Aug 1st event. After that day I believe that BTC will again rise and along with it the alts.
Yes I agree.
Yeah I am practicing my heaven-given virtue of patience.
@cryptopie got you a $0.01 @minnowbooster upgoat, nice! (Image: pixabay.com)
Want a boost? Click here to read more!
@cryptopie got you a $0.01 @minnowbooster upgoat, nice! (Image: pixabay.com)
Want a boost? Click here to read more!
Lol, my new desktop picture! :D
Gotta listen to Yoda...
We can never know the actuall value of bitcon till the current issue is resolved on August. I however think that Bitcoin might surpass 10K by next year if all goes well and we all will look back at the current price and scream: boy it was ssssssssssoooooo
cheap!!!! Steem will do great too so time to power up.
Feel free to check out my latest post on : Why Steemit will disrup social media and gain market share.
You are one of my best writer on crypto, hence why I am glad that I followed you- in order to stay in touch and send in my support. Upvoted
I'm with u that 8/1 will be a huge factor in determining how BTC and the larger cryptocurrency space scales --- or doesn't. I'm long on the space, think BTC can still go way up poss. to 1M or more. I'm not a maximalist, tho. I think the market can sustain competition and that it is actually best to have competition.
You are absolutely correct and we are on the same page. Lets keep oor fingers crossed that all will go well. Following you in order to stay in touch and drink beer (virtually) haha
Feel free to check out my latest post on : Why Steemit will disrupt social media and gain market share..am bullish on steemit
Agreed competition is good.
Good points. Imagine if more people knew about bitcoin, they would definitely drive up the price. It's happening already with countries like Japan and Korea starting to adopt bitcoin.
Yes in fact those countries seem to have been behind the massive uptick in demand.
Considering that no other cryptocurrency comes as close as BTC in terms of real world recognition, it is likely to be the cryptocurrency with the highest penetration levels soon. BTC is finite but humans are ever multiplying so it can only go up from here on... The only chances it has of losing significance is when a better one comes and replaces it, which is unlikely. ☺
I think it depends on what you mean by better though. There are technologically superior solutions (at least in some respects) but none of them have the same level of security at least as far as I know.
I tend to agree with all the points you make, although i am not super-educated on the Segwit thing. Thank you @lexiconical for your post on the subject, reading trough it right now!
Returning to your post i think that points 3 and 2 are some off the most important factors that will help the price of bitcoin to soar.
Branding is sometimes a quite overlooked fact, but just the fact that bitcoin was the first, and the longest living cryptocurrency to date, gives it a V.I.P seat in the market.
Your point about real world efforts, namely that actual real fiat money is used to support the network is also a very good point i think you make. As a side-note to that i think that the hardware dependent mining is the best way to go for security, decentralization and a decently fair reward-system for all contributing to the network.
I would just add as a half-joke, half-serious point to you article, namely :
Point 8: Providing a decentralized payment system that rewards the common-man and not the bankers, effectively helping the world to achieve a greater feeling of freedom.
Great article, peace friend!
Thanks - I agree with point 8 too!
interesting thought
Bitcoin's only main threat is loosing market share to other coins. They need to sort this scaling debate out or they could loose out to litecoin etc...
I think it will get sorted.
Wait until ICO companies start cashing out on ETH and Bitcoin will fly through the moons of Jupiter.
Perhaps.
Your thought is very relevant and you are on point, Bitcoin is indeed the gateway to other Crypto Currencies and is still undervalued however I think the $5k is still undervalue too, I personally think that Bitcoin should worth around $25k as at the time of this post and should rise above $50k before the end of 2018 since the total circulating supply is just 21million.
Wow you are very positive on it!
Thanks Sir.
I have voted. Bitcoin is to hard to understand for a non geek, I can't get my head around it but still think it has so much going for it and will hopefully be around for ever :)
Thank you!
Your welcome :)
I think you're right on all the points. This is a medium of exchange that offers decentralization, speed (hopefully to levels of Paypal in the future), and much lower transaction fees. Although there is hype in the financial world and the media, there hasn't been enough market acceptance. Plus, the economics may slightly be different from fiat. We don't know how the governing bodies would react to the evolution of speed and efficiency so we can only say that this is the very beginning. I believe there is around $90 trillion USD in fiat circulating the globe. We've barely touched 0.01% of its full capacity.
Now remember, bitcoin's core proposition is solid, but there are more evolved cryptocurrencies now showing. Be wary of where you invest in and always keep in mind of the risks involved.
For instance, if Ethereum never showed up, bitcoin would have been at least $5,000 worth. But it did. May we all be forever vigilant of the industry today. GLTAH.
As long as countries' currencies are being devalued and their citizens' wealth is at risk -- and as long as The Committee of 300 (the umbrella group of One World Government) need all world citizens to move to a One World Government Digital Currency - Bitcoin will be going up. It may slow down for a day or two, here and there, but up it goes. By this time next week, BTC in USD will pass the London Gold paper price per oz in USD. That will seem rather odd to many - that a faux currency has more value than a real precious metal. But, the One World Government wants everyone on digital currency, so that they can track purchases and sales - gains and losses - and most importantly, so that they can do a worldwide bail-in (think Cypress on steroids). Bitcoin is a One World Government tool to get everyone into the digital pen. They are very unlikely to slam it like their syndicate does to precious metal paper on the London Bullion Market. Hang on to BTC (or GBTC if you're trading it with your IRA account). BTC's ascent will continue to be steep and quick.
It's not a faux currency though. Also there is no one world government as such - just vested interests and I think their time is coming to an end.
The valuation of short term bitcoin will largely depend on the actions of the block chain in the coming months, will there be seigweit, forks, etc.
Long term however not just bitcoin is undervalued, all cryptocurrency is undervalued. The global marketcap of cryptocurrency is ridiculously low compared to any other investment market.
Yes.
I think it also depends upon the level of Interaction with conventional systems as people start adopting bitcoin it might go even more than $5k
I think it will eventually break 5K.
I think bitcoin has just started. Its just like the Pilot in the chain of a big series
I agree.
it will flourish soon as you say it is still Undervalued,many new steps are being taken so yeah future of Bitcoin is Bright!!
Thanks!
Actually we have to say thanks to u for writing such beautiful posts and giving us steem chat.
You're welcome. I didn't create Steemit Chat though!
I believe that Ethereum will overtake Bitcoin in the near future as it is also starting to be covered by mainstream media. Once people get into the crypto world via bitcoin, they quickly see the potential of blockchain tech beyond what bitcoin is. Satoshi got the ball rolling with bitcoin, but with the tech evolving, there are more valuable uses now.
Have you seen Craig Wright's recent speech? If so, does it affect how you view alts or ETH particularly.
No do you have a link to it? I don't really take the guy seriously but will take a look.
Well he makes the best BTC maximalist case I've ever heard.
I think that is unlikely. For one thing it is still harder to buy ether with fiat than bitcoin. Further ether has its own problems with scaling and the blockchain is already a huge size. I think there are some hurdles which have to be overcome and there is no easy solution to that. Additionally I think the entire purpose of ether is different and the current ICO situation is creating illusory demand.
Well Bitcoin is always going to be undervalued since Fiat currency is always losing value as they print more notes out of thin air. And as we know that there is a limit to the amt of bitcoins that can be created so it will always have a higher value since the fiat value is decreasing all the time.
Doesn't hurt us to have Goldman Sachs give a positive review of Bitcoin : )
http://www.cnbc.com/2017/07/03/goldman-sachs-says-bitcoin-could-rise-another-50-percent.html
Interesting. Thanks for the link!
I feel it's still going to take alot of ups and downs along the way till the time it doesn't hit the consumer market on a massive scale once bitcoin clears that stage i think it would be unstoppable. However, they have taken some initiatives like that which surely is the major step forward. In all I feel the current value of bitcoin is overvalued.
Ups and downs are always going to happen. I think we will have to disagree on the valuation though.
@cryptofriend I agree with you but as soon as it hits the consumer market the ups and down will be less volatile that's what I think. Maybe then the ups and downs are more like 0.5 percent on average either high or low and you are right ups are never gonna end that is the beauty of free market economy.
Yes I think that is true. The market is still comparatively small which is why we get the big ups and downs.
I suppose the bigger Bitcoin gets, the bigger all cryptocurrencies will have room to grow. I agree that at least doubling of the value is possible in the coming 2 years but at the same time i hope BTS, SBD and Steem make a move towards double digits in the same time period. The future will have to tell us where things will end. Right now im looking into the Synereo Amp for example and that project is yet another different angle to add to the crypto markets fame.
Well I think it is possible with Steem and BTS but it does depend on the BTC price.
Yeah i agree, the amount of BTS coins is much greater, so for that currency to pass 1 dollar mark the crypto market needs to become much bigger. And if that happens, bitcoin will likely be heavily involved in that growth.
As BTC is the gateway to many other coins, and the original, it will take a lot for it to dwindle. It's a household brand and name - therefore will feel safe to many new to cryptos. Predicting prices though - just too hard to do as if some fear kicks in near August 1st, many might jump to LTC.
I think the fear has lessened though.
I am on the same line as you and believe that bitcoin price will rise in next months and years. The rise will depend on internal but also external factors. First, price will be affected by (increase of) user adoption, transaction activity and trading.
Also important are major events that are not related to bitcoin like financial crises and regulation.
I believe that price won't have an upward trend, but many corrections before it gets "fair" price.
Do you mean it will have an upward trend? Not clear in your last sentence.
@thecryptofiend Yes, sorry for that. I believe that price will have upward trend in long run and get 5k. Also, I believe that price won't rise constantly, but falling sometimes and have corrections.
Bitcoin will remain as king of crypto. Great post mate! Upvoted
Thank you!
I also believe it's undervalued. Mostly because that's what I like to believe, haha. We might actually see $50k BTC and $5k ETH in the next years.
That would be nice!
Can you imagine all the lambos on the roads? :-p
All coins are under value!
Not sure about that.
I agree it's undervalued. Great article!
Should go 10k by end of this year!
Any evidence to justify that?
Bitcoin has been undervalued for ages. It's all about who jumps on the BTC earliest to get the most profit out of it.
I can definitely see it one day exceeding $10,000 and that is probably when people will begin to feel FOMO as well as get interested into crypto more.
Let's see
I hope it happens sooner rather than later.
I totally agree with you. Bitcoin have more potential and if businesses use Bitcoin for their trade it will be a high demand.
Btc will be worth millions per coin. By then you won't want the usd
I agree but it will take time to get there.
LTC seems to also go up after every Bitcoin correction. You can see this if you follow the trends.
Most cryptos do.
Oh yeah, it will grow a lot. We have only scratched the surface of cryptocurrency.
True.
I agree with a lot of your thoughts, although BTC will face a lot of challenges in the short term, I think the long term future is bright. I share similar beliefs in the Crypto Report.
It's probably better if you send me things like this in the chat otherwise it will encourage people to start posting links all over the place.
I am sorry! I removed it! Are you the cryptofriend in chat too?
NP. Yes I am. I have already shared it!
Thanks! I really appreciate it!
Hope you had a nice weekend!
goood.I like it very much