Sirwin
Sirwin

Bitcoin intrinsic value review 2021 and forecast 2022

By PatronMaster | You_crypto | 3 Jan 2022


On 18 July 2021, I was trying to find what was the intrinsic value of Bitcoin (link here).

My estimations were based on trade volume using the Visa analogy.

I made several estimates for the volume to predict what it would be in the last 6 months of the year 2021.

If was the same volume (100%) I said the Intrinsic value was $42400. If it was half (50%) $31804, and double (200%) $63608.

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In the last 6 months, the trade volume on average was less than the first 6 month (about 22% less).

So, Acording the model the Bitcoin intrisic value is 40K.

Estimate Price TO BUY $20K, Estimate Price VALUE $40K, and Estimate Price TO SELL $60K

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This model is very simple, so I'm just using it for an overview of what's going on.

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The model worked well again. I see it is closer to the SELL level so I know we are in the bull market phase.

We had two opportunities to sell and one opportunity to buy below intrinsic value but only at a small discount.

 

Forecast 2022

If it was a normal year (without current pandemic issues and runaway inflation) I was expecting about 20% increase in trade volume in average in the next 3 years.

The current inflation rate (or decrease in the purchasing power of the dollar) will affect the price of all assets (including Bitcoin). But right now, the S&P500 and the real estate market are overvalued, even if in 2022 we have 7% inflation again, will have no impact on price. The short of supply will affect inflation, but tends to decline during 2022. 

I don't see anything else that takes Bitcoin beyond what we expected (we're still at the same adoption rate). By pushing Bitcoin down, we FED tapering (involves slowing asset purchases) and raise interest rates. I won't go into detail here because I think the Fed doesn't want to go back to the 1980s with very high interest rates.

So, I am considering the following scenarios:

  • -10% - The Fed goes far in the tapering/interest rates and the economy starts to fall.
  • 10%  - The FED make a perfect Job, but some Bitcoin regulations lead investors to look for other assets.
  • 20%  - What I am expecting, good work from FED and business as usual.
  • 50%  - Inflation rate and short in supply still to high that leaves some investors reinforce their positions.
  • 100% - Covid strike harder again that leaves that FED need to purchasing more assets and put on hold tapering and the increase interest rates.

 

My 2022 Forecast

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I expecting until April Bitcoin steady, after April until September some bear market (I hope can buy some Bitcoin here below 30K) and in last part of year back to intrinsic value 47K.

I do not forecast any Bull Market unless the major countries starting print more money (in huge quantities).

There is a behavior that I haven't mentioned here because I think the chances of achieving it are very low. I'm talking about "fear" if the Fed and eurozone central bank can't control inflation and we still see inflation skyrocketing (we know currency inflation is 7%, but if we use the '80s formula to do the calculation is 16%) and people have noticed that and they started to lose faith in the country's currency (as happened in Germany in the 1920s, or in 2021 Venezuela, Sudan, Lebanon, Argentina, Turkey...), we can see the price of all assets increase so fast that it can lead to hyperinflation.

Note: I am not financial advisor so do not use this information to trade.

So, do you think the information was useful for you?
What is your forecast for BTC price?

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PatronMaster
PatronMaster

https://www.youtube.com/channel/UCW84pMA9XZJliKZbb72M0zA


You_crypto
You_crypto

As a data analyst and data scientist, verifying crypto data and trying to gain value. We try to apply prediction models, check history and observe patterns, which gives us an advantage for success.

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