Valuing BTC Using a Macro Framework
Relative values must apply for it to be an asset
As I have shown over the years, all asset prices trade in broad bands versus each other,
going up and down in secular cycles. Whether it’s Gold versus Stocks, or Oil versus Gold, or
Wheat versus Oil, or Property versus Gold. All assets have a relative value and always will do
(and must do to be an asset).
You can see the obvious relative value from the chart of Gold versus Platinum. They trade in
a range. The same should be true of Bitcoin…
Thus, taking into account that only 55% of all Bitcoins have been mined, versus 65% of all
gold, then the total stock of Bitcoins adjusted for the lower supply may well be equal to the
same equivalent value in gold.
A fudge, but not a stupid one
Look, this is far from perfect and a mathematician would be able to model it, taking into
account difficulty of future mining etc., but it is beyond my abilities…
However, let’s use a broad guesstimate. One Bitcoin should theoretically be worth 700
ounces of gold or pretty close to $1,000,000, if we adjust existing supply of both to equal each
One BTC is currently worth 0.14 ounces of gold.
That gives BTC an upside of 5000 times to equal the current price of gold, supply adjusted.
Clearly, I and everyone else believes that Gold may well be much higher than here in the next
5 to 10 years, thus versus the US Dollar the upside for BTC could be multiples of that.
Now, before you shake your head, simply go back to the chart of Gold versus the US Dollar
and just recognise that it has risen 8750% since the 1920s. And just remember that Microsoft
rose 61,000% from its IPO to it’s peak.
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