Standard valuation approaches for assets
Let’s assume that bitcoin was an investment asset. Economists regard assets
as overvalued if the market price significantly exceeds the fair price. The fair
price is usually calculated with the help of (discounted) future payment flows or
relative prices. Bitcoin does not offer future payment flows.
It is not possible to
determine a present value, as in the case of, say, let apartments or dividend-
paying stocks. Relative prices, the second common valuation criterion, may
point to an overvaluation if they are unusually high compared to either their
historical level or to prices in other sectors, regions or countries. For example, if
we consider residential property, we compare house prices to rent income, or if
we consider equities, we compare market capitalisation to the relevant
Once again, there is no benchmark to which the bitcoin
price may be compared.