As cryptocurrencies have become a source of debate throughout the investment landscape, a frequently debated topic is the true value of bitcoin, the largest digital currency. With the benefit of a recent rally, bitcoin currently trades over $8,200, though that is well below the December peak of $20,000.
Some market observers believe bitcoin can return to $20,000 and go even higher. Others have some doubts and/or extremely bearish views on the digital currency.
“It took two economists one three-course meal and two bottles of wine to calculate the fair value of one Bitcoin: $200,” reports Bloomberg. “It took an extra day for them to realize they were one decimal place out: $20, they decided, was the right price for a virtual currency that was worth $1,200 a year ago, flirted with $20,000 in December, and is still around $8,000.”
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In other words, the two economists, Savvas Savouri and Richard Jackman, believe bitcoin is currently overvalued by more than 40,000%.
Not Bitcoin’s First Brutal Price Forecast
This is not the first time bitcoin has endured a brutal price forecast.
“Investment research firm Capital Economics is chiming in on the bitcoin value with a clear likely controversial view. The London-based research provider believes bitcoin is worthless. Capital Economics also believes bitcoin’s recently intimate correlations to the S&P 500, the benchmark gauge of U.S. stocks, is set to expire,” reports Cryptobase.io.
Bitcoin’s rally above $8,000 comes just a couple of weeks after the cryptocurrency committed a death cross, where its 200-day moving average fell below its 50-day line. The death cross is normally bearish, but it needs to be validated, something bitcoin did not do.
The range of bitcoin price estimates is confounding. Some bitcoin bulls believe the currency can got to $25,000 while others have high six-figure price forecasts for the coming years. On the other hand, there are not shortage of critics, either. For example, Warren Buffett previously said the idea of bitcoin having intrinsic value is a “joke,” according to Bloomberg.
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Recently, the Bitcoin Dominance Index has been rising, confirming the dominant perch of the cryptocurrency. After bitcoin, the largest cryptocurrencies are Ethereum, Ripple, Bitcoin Cash and Litecoin.
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