Bitcoin proponents are expecting a prolonged bull-run from the asset while there are hopes for it to cross an all-time high (ATH) price mark. But irrespective of the bull and bear runs, what should be the natural worth of bitcoin in the market based on the services that it offers?
BlockPublisher recently got in touch with the Chief Executive Officer of Rokfin, Martin Floreani, who talked about the natural value of based on the services that it offers, stating:
What is a service worth to society that offers digital ownership, a network you don’t need permission to use, and money a government can’t inflate? People are slowly waking up to why that service is important. Bitcoin’s actual worth is the value of all future needs for that service discounted to today. If I had to value it would easily be greater than $100,000 per bitcoin.
Martin here highlights one of the prime services that bitcoin provides to the world. As the entire bitcoin network is based on the trustless, decentralized, immutable technology of blockchain, secure digital ownership of the asset is offered to the public.
Bitcoin price has been the center of attraction in the crypto world ever since its beginning back in 2008. Rising from the lows of $3,000s that were seen at the beginning of this year, the digital asset is now standing at a staggering $11,873 price mark at the time of writing.
Being decentralized, there is no single party in control that permits transactions on the network, rather it is the mining nodes that synchronize with each other to maintain the network. Since the network is open, anyone can participate in the network to act as a node as well. Thirdly, bitcoin does not fall under the influence of any government across the globe. This establishes bitcoin’s potential of becoming a global reserve currency where the people are in control.
The main reason that currently establishes the price of bitcoin in the market is pure speculation, that is people believing this asset carries some value and will carry some in the future as well. There is no gold, oil or any other commodity that backs it to maintain its price.
Speculation is the reason major price spikes and drops are often observed in the bitcoin market. When bull-run hits, more people step into this space expecting huge returns in a short window of time. The supply-and-demand mechanism thus pumps the price of the bitcoin up.
When a bear run starts, people start selling and hence the price drops. Hype and the fear of missing out (FOMO) play vital roles in this regard. A positive media sentiment increases adoption and hence the price rises. Bitcoin price treads on this fine bridge of speculation all the time.
Martin points out the price mark of over $100,000 for the digital asset, but this isn’t the first time an industry expert has shown such a strong “bull attitude” towards bitcoin. Just recently, Anthony Pompliano, a renowned thought leader in the crypto space and the co-founder of Morgan Creek Digital, marked out the same $100k price level for bitcoin by the end of 2021.
In the past, people like John McAfee, the famous cybersecurity expert, have also put up the million dollar price prediction for bitcoin. He has said:
I don’t care if it’s a penny today, it’s going to be 2 million dollars very soon…What’s happening in the market has nothing to do with the reality of its value.
Predictions for bitcoin going all out in terms of its price are floating around in numbers. The staunch proponents of this asset do believe bitcoin will overtake fiat in the future. But still, there are many financial gurus like Warren Buffet who dismiss this digital asset completely.
All in all, bitcoin is still only a decade-old and it stands against the system of banking that has been there for centuries. Advancements are being made on both the technological and legislative fronts. It will be interesting to see where it lands in terms of its price and how it defines its role either as the digital gold or as a reserve currency moving into the future.