When Will Bitcoin Hit $3,000?
- Thread starter JeffGoldman
- Start date
My point is why are you treating the USD as a store of value when the supply of it has increased exponentially since 1971? The dollar was backed by gold between 1900 and 1971. Bitcoin is deflationary. e.g limited to 21 million coins that are harder to mine as the difficulty increases. What would you put the decline of the dollar at since 1971?
Tea party say 98% http://www.politifact.com/virginia/...ia-tea-party-says-dollar-has-lost-98-percent/
Zerohedge say 82%
http://www.zerohedge.com/news/41-ye...standard-look-how-we-ended-economic-purgatory
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L
lovethetrade
With the information currently available, I believe intrinsic value of Bitcoin is USD$2200.
Its a worth a fair premium to gold but not quite double its value. Thats not to say it can't trade at a significant premium to that price based on future expectations.
Its a worth a fair premium to gold but not quite double its value. Thats not to say it can't trade at a significant premium to that price based on future expectations.
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I should write a Bitcoin FAQ, because I hate to repeat myself...
1. The dollar is backed by the US military's might. Ask a guy called Saddam what happens when you switch from petrodollars to euro.
2. Bitcoin is by definition inflationary, because more and more is made. Nobody living today is going to be alive by 2140 when it stops...
I blocked out the rest when you mentioned Teaparty...
1. The dollar is backed by the US military's might. Ask a guy called Saddam what happens when you switch from petrodollars to euro.
2. Bitcoin is by definition inflationary, because more and more is made. Nobody living today is going to be alive by 2140 when it stops...
I blocked out the rest when you mentioned Teaparty...
What figure do you put on it for the decline in the dollars value since 1971.
http://www.usinflationcalculator.com/
83% decline.
But...if you own loads of dollars, you are hardly going to stuff them under your mattress. You will at least put them in a bank account or in t bills , which pays interest.
According to http://www.tradingeconomics.com/united-states/interest-rate, the average Fed Funds rate was 5.8% between 1971 and 2017. Lets say your bank or t bills paid 5% per year on average. The value of say $1000 deposit in 1971 will now be $9434. Inflation adjusted to 1971 dollars, your deposit now is $1603. So you still enjoyed a 60% inflation adjusted returned rather than a 83% decline.
Bitcoin does not pay any income afaik.
83% decline.
But...if you own loads of dollars, you are hardly going to stuff them under your mattress. You will at least put them in a bank account or in t bills , which pays interest.
According to http://www.tradingeconomics.com/united-states/interest-rate, the average Fed Funds rate was 5.8% between 1971 and 2017. Lets say your bank or t bills paid 5% per year on average. The value of say $1000 deposit in 1971 will now be $9434. Inflation adjusted to 1971 dollars, your deposit now is $1603. So you still enjoyed a 60% inflation adjusted returned rather than a 83% decline.
Bitcoin does not pay any income afaik.
How do you calculate the intrinsic value of a bitcoin?