Please put the bitcoin as a commodity to analyze
Bitcoin really worth it? Today is like the price of $15000, or the true value of only about $3000? Since last September bitcoin prices continued to surge, perhaps after a number to reflect its value.
General virtual currency fans divided into two camps. One says that these money is a medium of exchange, and another will be regarded as investment. From the current situation of investment camp win temporarily: use bitcoins to buy most of the goods are not realistic, but its price is soaring, has been rising since mid September last year nearly three times.
If bitcoin is a kind of investment, so it is close to the gold. Both are a store of value, have some intrinsic properties against inflation, because the supply is limited, and with the passage of time the new mining reserves will increase the cost of technological breakthroughs, unless.
However, if bitcoin really is a digital gold, investors should be used as a commodity to analysis, evaluation factors of its supply side constraints and drive demand. From this point of view is not optimistic about the results.
The long term the most important factor for the gold price is the cost of production. When demand fell when the production cost will become a natural price support to a certain extent. Of course, when the demand, the price of gold may rise, away from this support, but once inflation or dollar gold fears receded, began to lose its appeal as a store of value, the marginal cost of the price will drop to production.
The last round of gold bull market is a typical example: according to FactSet data, in 2011 the highest price of gold rose to near $1900 an ounce, is the largest listed gold producer BarrickGoldCorp. was more than three times the cost of production. By the end of 2016, the price of gold fell below $1151 per ounce, according to FactSet data, which is slightly higher than the production cost of $844 per ounce of gold Barrick.
Bitcoin same analysis results show that, if the demand is depleted, the price may be facing a sharp decline in the situation. According to the analysis of one of the largest electricity supplier in Louisiana, CrescentElectricSupplyCo., a bitcoin mining cost only $3224. According to the energy information administration of the U.S. Department of energy (EIA) data, as of October, the state has the lowest average residential electricity cost. For bitcoin mining companies, after the purchase of mining equipment for power, cost is the biggest.
On the demand side, some investors seem to bitcoin as a hedge against currency devaluation, which is similar to the function of gold. Deutsche Bank (DeutscheBankAG, DB) estimates that Japanese retail investors are the backbone of bitcoin rose last fall behind, while the yen in the same period last year fell, during early September to mid November by about 6%. According to the Japanese bank Nomura Securities (NomuraSecurities) said that about 40% of bitcoin transactions are denominated in Japanese yen.
Next year if the yen rose sharply, or even investors are beginning to think, compared to gold, bitcoin as a hedging tool for pricing is too high, bitcoin may face a long way to fall.