Original Title: A Bitcoin Worth $200K? 4 Valuation Studies
Author: Viee, Core Contributor at Biteye
Recently, BTC fluctuated to around $56,000, while VanEck, a U.S. asset management firm, predicted in July that BTC could reach $2.9 million by 2050—a staggering projection.
But what should Bitcoin’s price be? $0, $50K, $1M, or higher? In this article, we explore 4 Bitcoin valuation methods to help you better understand its intrinsic value.
Bitcoin Valuation Approaches
Traditional assets like stocks and bonds have established valuation frameworks. Bitcoin, however, presents unique challenges, with no single "best" method. Below are 4 widely used models:
Production Cost Model
- Mining consumes electricity/resources, making production cost a baseline for Bitcoin’s value.
Stock-to-Flow (S2F) Model
- Measures scarcity by comparing existing supply (stock) to annual production (flow).
Metcalfe’s Law
- Network value grows exponentially with user adoption.
AHR999 HODL Indicator
- Created by Weibo user ahr999, it combines short-term ROI with price deviation from expected value.
01 Production Cost Model
Unlike fiat currencies (e.g., USD/EUR), Bitcoin requires energy-intensive mining. Thus, its production cost reflects a price floor.
- Key Insight: Bitcoin’s market price rarely stays below mining costs long-term.
- Current Data (Sept 2024): Average mining cost = $74,000/BTC (source).
Implication: With BTC trading below $74K, two outcomes are likely:
- Miner attrition reduces supply.
- BTC price rises above production cost.
👉 Why Mining Costs Matter for Bitcoin’s Price
02 Stock-to-Flow Model
S2F evaluates scarcity:
- Stock = Total supply (~19.75M BTC).
- Flow = Annual production (~164,359 BTC).
- S2F Ratio = 19.75M / 164K ≈ 120.1 (vs. gold’s 59.7).
Bitcoin vs. Gold
- Bitcoin’s scarcity = 2× gold’s.
- Gold’s market cap: $16.8T vs. Bitcoin’s $1.1T.
- If BTC matched gold’s valuation relative to scarcity, its price could hit $1.7M (30.5× current price).
S2F Real-Time Chart Suggests: Current valuation = $210K/BTC (source).
03 Metcalfe’s Law
Metcalfe’s Law links network value to user growth:
- Formula: Value ∝ (User Count)².
- Bitcoin Addresses (2019–2024): 26M → 54M (2.076× increase).
- Implied Price Growth: 2.076² = 4.3×.
- Current Valuation: ~$41K/BTC.
04 AHR999 HODL Indicator
This metric blends:
- Short-term ROI.
- Price deviation from expected value.
Interpreting AHR999:
- < 0.45 = Buy.
- 0.45–1.2 = DCA.
1.2 = Overpriced.
Current Calculation (Sept 2024):
- BTC Price: $57,481.9.
- 200-Day DCA Cost: $63,570.07.
- Index Growth Valuation: $86,628.
👉 Bitcoin Accumulation Strategies Explained
05 Key Takeaways
| Model | Valuation | Key Insight |
|---------------------|----------------|---------------------------------|
| Production Cost | $74K | Price floor via mining costs. |
| S2F | $210K | Scarcity-driven appreciation. |
| Metcalfe’s Law | $41K | User growth = Exponential value.|
| AHR999 | $86K+ | Combines DCA & market cycles. |
Final Note: These models offer perspectives, not predictions. Always DYOR and comply with local regulations.
FAQ
Q1: Which model is most accurate?
A1: None is definitive—each highlights different aspects (cost, scarcity, adoption).
Q2: Why does Bitcoin’s price deviate from models?
A2: Market sentiment, regulations, and macroeconomic factors play significant roles.
Q3: Should I use AHR999 for timing buys?
A3: It’s a tool, not a crystal ball. Combine with fundamental/technical analysis.
Q4: How often do these valuations update?
A4: Production cost and AHR999 adjust frequently; S2F and Metcalfe’s change with network data.