The fundamental value of bitcoin

 What is the fundamental value of bitcoin?

The fundamental value of bitcoin is that it is an open source currency Anyone can use trade or purchase bitcoins without asking permission from a bank or government

 Bitcoin is not a fiat currency with legal tender status in any jurisdiction but often tax liability accrues regardless of the medium used.

 There is a wide variety of legislation in many different jurisdictions which could cause income

With bitcoin hitting new highs, many people expect the price of this crypto-currency to reach $ 45,818.50 or more.

With bitcoin reaching new heights, many people expect the price of this cryptocurrency to reach $ 45,818.50 or more.  Given the recent rise in the price of this currency, and the reaching of new levels, this rise is expected to continue.  

These statistics are generally based on tracking the trend of "charts" and "technology analysis" of the price of this currency, as well as the expectations of some interested parties.

Given the recent rise in the price of this currency to new levels, this rise is expected to continue.

These statistics are generally based on monitoring the trend of the "charts" and "technology analysis" of the price of this currency, as well as the expectations of certain interested parties. 

How is the intrinsic value of a currency calculated?

When we talk about the intrinsic value of the currency, we can say that its value is based on the return (or cash flow) that is generated by the asset.

Example: The main value of the apple tree for the capitalist is not in the tree itself, but in the quantity of apples that this tree produces.

The same is true for residential real estate, whose principal value depends on the amount of rent the owner receives.

It can be said that the primary value of any currency, whether fiat or crypto, lies in the fact that it is a reliable and acceptable unit of exchange.

In the past, gold and silver coins had essential value by melting them down and obtaining their precious metals.

This is no longer possible with paper money, whose value depends only on the trust of those who approve it at face value.

"As cash, bitcoin could become the primary peer-to-peer settlement technology for the unbanked in the cashless world of the future," said Jeffrey Kendrick, head of the bank's crypto-currency research group (former Australian Treasury authorities).

Crypto-currencies that can maintain a safe value are likely to become settlement instruments.

Fundamental analysis without cash flows

Bitcoin and other assets that do not generate cash flows, such as gold and silver, cannot be valued based on future cash flows. 

Therefore, fundamental analysis for Bitcoin aims to rigorously determine where the price of the asset is headed. There are countless methods for determining this number, but most of them rely directly on the supply and demand of the currency.

The circulating supply of Bitcoin can be easily and accurately estimated due to the currency's predictable monetary policy. This leads to several models, including the oft-cited stock-to-flow model. 

This model aims to predict prices based on the rate of new bitcoins added to the network relative to the existing supply.

A more complex fundamental analysis aims to determine the demand for the currency. Bitcoin itself does not change very quickly. The network is very stable, making it difficult to adjust estimates based on technology. 

However, macroeconomic events can affect how people use Bitcoin. Investors can pay attention to changing sentiments among key investors and track Bitcoin metrics such as on-chain activity.

To project demand for Bitcoin, investors can look at global economic patterns. For example, the increase in the monetary bases of fiat currencies is commonly a precursor to inflation. 

Fundamental analysis of this macro-model can lead investors to conclude that demand for Bitcoin as an inflationary hedge will drive up the price of Bitcoin.