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"Overvalued" means "I don't think it should be worth this much" in this case. The fair value for cryptocurrency, just as with everything else, is determined by
by Cyberdog 9y ago
"Overvalued" means "I don't think it should be worth this much" in this case.
The fair value for cryptocurrency, just as with everything else, is determined by the market(s) (at least, when it is unadulterated by government obstruction and price-fixing and such). So to determine the fair value of a bitcoin, go to the exchange of your choice and look at the price. If you don't like that price, try a different exchange. You might not want to pay that price right now, and that's okay, but that's what the fair value is right now.
- danhak 9y agoThis is circular logic and not really what I was getting at. Productive assets are valued based on expectations of future cash flows, independent of market value. You’re incorrect in saying the value of everything is determined by the market. To quote Warren Buffett, “price is what you pay, value is what you get.”
- Cyberdog 9y agoIsn't the expectation of future cash flow factored into the current market value of something? I "overpay" for Apple laptops because I know I'll be able to quickly make my money back by doing productive things with them.