Bitcoin is still up 548% in the past year but it’s been struggling really, really hard in 2018. Bitcoin peaked on December 17th, 2017 at $19,205 and since then it has undergone a period of extreme volatility with a definitive downward trend. Currently, Bitcoin is valued at $7,397 which means all those people who sold their houses and took out loans to buy Bitcoin last year are getting absolutely hammered by the crashes.
The big question has always been ‘what is Bitcoin *actually* worth?’ The market dictates the value, obviously. And Bitcoin’s value is directly tied to its utility in the future of a world built on blockchain technology. But what is it worth now? A study by ETH Zurich, a Swiss University, determined that Bitcoin is still drastically overvalued (via Fortune:
Drawing on a modified version of a model that assigns networks a value proportional to the square of the number of active users, and an equation that can capture how speculative bubbles evolve and grow, researchers at the Swiss university were able to observe how the cryptocurrency’s value rises with participation.
Additionally, by pulling from past data, the researchers say they can now better track and spot potential future crashes. On at least four different occasions — one each in 2011, 2012 and 2013 plus the most recent at the end of 2017 — the model had determined a fundamental value was heavily exceeded by bubbles that grew and burst.
Their analysis “indicates current support levels for the Bitcoin market in the range of $22–$44 billion, at least four times less than the current level,” the researchers said, according to a March 29 MIT Technology Review article. (via)
These analysts are saying Bitcoin is overvalued by ‘at least four times’ its actual worth which would mean at the VERY most a single Bitcoin is worth around $1,849 at this very moment (according to the study). That’s less than 1/10th of what Bitcoin peaked at back in December when everyone on the planet was clamoring to get in on the action. I can’t even begin to process how much money has been lost by crypto investors in the past four months.
For more on this study you can click here to visit Fortune.com.