Here’s a simple, valuation model for Bitcoin.

Assume:

- world GDP growth in real terms is 2% pa forever

- world GDP today is $100t

- real interest rates are 2%

- BTC annual emissions have fallen to near zero

- 18m coins in circulation net of lost

Every year output increases by $2t. This is available to holders of BTC to buy and is in effect a real yield for Bitcoin owners.

Present value of a $2t perpetual annuity discounted at 2% is $100t. Or $5.6m per coin.

Why is this wrong?

#Bitcoin