Bitcoin Enters the Room!

Here is how Magnelibra Values Bitcoin

Long time Magnelibra readers know we have been big believers since BTC came to fruition. We have watched this arena turn from a novelty to a force to be reckoned with. We remember all the Jaime Dimon types calling for its demise, but we knew the truth, the sharks will always jump aboard when they smell blood (money) in this case and we believe with the announcement by BlackRock that this will lead to some solid bidding in the future.

We also don’t believe that Wall Street is actually the best use case for Bitcoin, we don’t feel its a security, but rather the force is truly with the P2P technology and the immutable ledger. We will continue to be big believers and we will show you how we value it or actually how we have valued it since the beginning.

When we look at Bitcoin we look at as a technology to transfer labor value into utility for goods and services. With that said we believe that the best metric of global utility and goods and services is GDP of course and thus our equation just has a few components, with truly the only variable being how much of a % will Bitcoin transact in relationship to total GDP. If we simply use 1% of total GDP as our estimate and baseline then we come up with the following US$ value for Bitcoin.

OUR VARIABLES:

Total Global GDP = $106T

Total Bitcoin Supply = 21m

Actual total Bitcoin Float (ABF) considering a 20% loss rate = $17m

% of Transactions as a baseline of GDP = 1%

The resulting Equation is, ( Total GDP x 1% ) / 21M = $50,476 $/BTC

Using Actual Bitcoin Float we get $62,353 $/BTC

This is and has always been Magnelibra’s valuation metric. We believe BTC will in the future garner most likely 50% of all global transaction volume and thus you can see the inherent value. Also understand that Bitcoin is an anti-fiat, meaning by design, it counteracts the debasement of fiat currencies. Its fundamental design feature understood that in order for global central banks to increase GDP they need a constant debasement of their fiat currencies, or more commonly referred to today as quantitative easing and or central bank credit extension or balance sheet extension.

So we love it, we think its a great utility for the digital future and one that we hopefully excite you to research more about. Here is the latest chart for Bitcoin: