Bitcoin is now finding its true value
A good comparison with what happened with the Bitcoin
price is to look at the US housing bubble between 1999 and 2006. Over this period, house prices rose 80%.
But this didn’t mean that houses weren’t worth anything, they simply were overpriced, David Zeiler in Money Morning US
When the US housing bubble burst in 2005, prices began falling to their true value. And those prices were close to what they would have been before the market got overheated.
And this is what’s happening with Bitcoin. It’s finding its true value.
As a digital currency, it means two parties can use it to exchange money anywhere in the world without the need for banks. And there’s also a growing interest in the technology behind Bitcoin, the blockchain.
Now the hype around Bitcoin has subsided, what’s in store for the price of the digital currency?
Where to now for the Bitcoin price?
Since Bitcoin hit a post-bubble low of $177.28 on 24 January, it’s been slowly climbing higher since then. The current uptrend looks like the beginnings of a recovery in its price.
Also, it’s important to note that the Bitcoin price this year has traded higher than it did before the Bitcoin price bubble began. This suggests the worst is over.
So where is the price going?
The company behind the BitIndex, Pantera Capital puts a fair value of $370 on Bitcoin. It bases this on transaction volume, Google searches, merchant adoption and developer interest.
Bitcoin payment processor ALFAcoints thinks the value is around $496.56, around 70% higher than its current price. It bases this value using a number of factors including the cost of Bitcoin mining.
As long as the price of Bitcoin maintains its current trend, it looks like it’s heading upwards. It’s currently trading at around $289 a coin.
So there you have it, what could be in store for the price of Bitcoin.
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