As many know, bitcoin’s price has fluctuated greatly and it has fallen significantly as well from its $20,000 high to the current hovering around $7,000. The price fluctuations lead to the question of what the currency’s current true price is and many seem to disagree.
Economic models have an estimate of bitcoin prices that is based on the simplest metric – supply and demand. Further, many first look to the price of mining one bitcoin. According to Global Blockchain CEO Shidan Gouran:
“What this means for the present is that motion is already happening. Because it costs about $6,000 to mine a bitcoin, it couldn’t go too much lower than that. If no one sees any value in it, it will naturally command its ‘hard value’ price of about that much. But as we can see, people clearly do not see value in it. For example, the efforts to legalize a Bitcoin ETF are persisting. Further, story after story is hitting the news about big-name institutions taking steps to trade Bitcoin. While the idea of these big-time users of bitcoin were nothing more than a fantasy about a year ago, the signs are actually starting to emerge that it’s going to happen. So undoubtably this is simulating demand to some degree.”
Senior Analyst at Investing.com, Clement Thibault mentioned to Forbes,
“If the level was the result of an event, development or adoption, that would be something substantial – but at this point, we’re trying to invent a narrative to explain the price action when there’s nothing to explain.”
A professor at the Department of Economics at LIU Post, named Panos Mourdoukoutas, presented three economic models run by Greg Giordano, the co-author of his study. The models include the Haye Model, the Market Model, and the Wheatly Model. The first two models emphasize the supply of the Bitcoin market and estimate its intrinsic value at $8,778.11 and $8,335.54, respectively. The final model looks at the demand for bitcoin and estimates the currency’s value at $1,080.58.
As is clear, there is no ultimate agreement concerning bitcoin’s value and it is likely that the lack of consensus will continue for some time.