Bitcoin’s valuation continues to be a hot topic in the crypto world. In a recent discussion, Scott Melker, host of The Wolf of All Streets Podcast, sat down with market analyst and host of The Mark Moss Show, Mark Moss, to examine the complexities of Bitcoin’s future value. They explored various frameworks to understand Bitcoin’s potential and emphasized the need for a strategic approach to investing.
Scott Melker opened the conversation by emphasizing the common desire to overestimate the price of bitcoin. He emphasized the importance of a calm, measured approach, especially in the context of institutional adoption. “There has to be a way to put some kind of value model of what bitcoin could look like in the future,” he said.
Drawing on his extensive experience in venture capital and market analysis, Mark Moss provided a comprehensive analysis of bitcoin’s valuation. He emphasized the importance of having a plan before investing in bitcoin. “Never buy something unless you have a plan,” he said, outlining the basics, such as understanding why you’re buying it, how it fits into your portfolio, and what you want from it.
One of Moss’s key frameworks for evaluating bitcoin involves viewing it through the lens of a venture capitalist. He likened Bitcoin’s disruption of traditional stores of value to Uber’s disruption of the taxi industry. Evaluating markets where Bitcoin is challenging (such as bonds, gold, and real estate), Moss estimated that if Bitcoin were to capture just 10% of these markets, its potential market value would be $90 trillion. That works out to about $10 million per bitcoin, assuming a fixed supply of 21 million tokens.
Another approach discussed was the application of Metcalfe’s Law, which states that the value of a network increases with the number of users. Moss cited Jurrien Timmer of Fidelity, who predicted that bitcoin could reach $1 million by 2030 based on network growth and adoption curves. This projection aligns with other prominent predictions, including Cathie Wood and Plan B’s stock-to-flow model.
Moss also touched on the impact of currency depreciation on the value of bitcoin. He explained that an increase in global liquidity and subsequent decline in currency value leads to higher prices for assets like bitcoin. Moss cited projections from the Congressional Budget Office, which suggest that U.S. government debt could rise significantly by 2030.