Bitcoin's valuation remains a hot topic in the cryptocurrency world. In a recent discussion, Scott Melker, host of The Wolf of All Streets Podcast, sat down with Mark Moss, market analyst and host of the Mark Moss Show, to delve into the complexities of bitcoin's future value. They explored various frameworks for understanding bitcoin's potential, emphasizing the need for a strategic approach to investment.
Scott Melker opened the conversation by highlighting the common desire for hyperbolic predictions about bitcoin's price. He stressed the importance of a calm, measured approach, particularly in the context of institutional adoption. "There has to be a way to put some sort of value model on what bitcoin could look like in the future," he said.
Mark Moss provided a comprehensive analysis of bitcoin's valuation, drawing from his extensive experience in venture capital and market analysis. He emphasized the importance of having a plan before investing in bitcoin. "Never buy something unless you have a plan," he stated, outlining key considerations such as understanding why you're buying, how it fits into your portfolio, and what you expect from it.
One of Moss's primary frameworks for valuing bitcoin involves viewing it through a venture capitalist's lens. He compared bitcoin's disruption of traditional value storage methods to Uber's disruption of the taxi industry. By assessing the markets bitcoin is challenging—such as bonds, gold, and real estate—Moss estimated a potential market cap of $90 trillion if bitcoin captures just 10% of these markets. This would translate to approximately $10 million per bitcoin, given the fixed supply of 21 million coins.
Another approach discussed was the application of Metcalfe's Law, which states that the value of a network increases with the number of its users. Moss referenced Jurrien Timmer of Fidelity, who predicts that bitcoin could reach $1 million by 2030 based on network growth and adoption curves . This projection aligns with other notable predictions, including those from Cathie Wood and Plan B's stock-to-flow model.
Moss also addressed the impact of currency debasement on bitcoin's value. He explained that the increase in global liquidity and the subsequent decline in currency value lead to higher prices for assets like bitcoin. Moss cited projections from the Congressional Budget Office, suggesting that U.S. government debt could rise significantly by 2030.