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They quote a "Maximum fair market value" of $1300 based on a couple of different methodologies. In my (limited) experience, when banks forecast prices (for sto

They quote a "Maximum fair market value" of $1300 based on a couple of different methodologies. In my (limited) experience, when banks forecast prices (for stocks, indices, FX rates etc) they always quote a number within a reasonable-sounding percentage of the current price, because not to do so risks being wrong and looking stupid. This means that most of the time they are not far out, and when it really matters (eg 2008) they are miles out (and so is everyone else). So even if BofAML actually thought that the "maximum fair market value" was significantly higher than $1300, I doubt they'd have said so, simply to avoid the reputational risk.

jsmcgd 13y ago
Totally agree. This figure is ridiculous. I actually laughed out loud when I read it. Like anything the price is based on supply and demand. The supply is fairly predictable. The demand is a complete guess at the moment. A maximum market capitalization of $15Bn? Why? The 100 fold increase risks getting ahead of its fundamentals. What fundamentals? The nature of Bitcoin since its inception has been expotential growth. I'm not saying that will continue forever - it can't - but there's nothing to suggest that this rate of growth will stop when that value of a bitcoin reaches $1300. Anyone can predict a change of a few percent in the short term and be correct to within 10%. But where does that get you? Which one of these financial analysis publications told their readers something useful, like in 2007 there's a financial crash coming or 2009 invest heavily in bitcoin? None. Sorry, that was a bit ranty.
- james1071 13y ago
  Supply is not predictable as there will be substitutes.
  - adamcanady 13y ago
    As in, other digital currencies or transactions? I think he was referring to the known supply produced by mining.
  - simplemath 13y ago
    The ecosystem and brand awareness of Bitcoin is novel though. It will take a full transition from people becoming marginally aware of Bitcoin to comfortably trading in cryptos before a "replacement" even one with a better design - and IMO there hasn't been one yet - threatens or supplants BTC.
dllthomas 13y ago
It seems like since they're just quoting a maximum, higher should be safer. There can always be reasons it didn't hit the maximum, there shouldn't be reasons it exceeded it.
timothyjcoulter 13y ago
Aside from the widely fluctuating prices, it could easily reach that point. Looks like it's on its way down now. http://live.bitcoinindex.es/ http://live.bitcoinindex.es/

jsmcgd 13y ago

Totally agree. This figure is ridiculous. I actually laughed out loud when I read it. Like anything the price is based on supply and demand. The supply is fairly predictable. The demand is a complete guess at the moment. A maximum market capitalization of $15Bn? Why? The 100 fold increase risks getting ahead of its fundamentals. What fundamentals? The nature of Bitcoin since its inception has been expotential growth. I'm not saying that will continue forever - it can't - but there's nothing to suggest that this rate of growth will stop when that value of a bitcoin reaches $1300. Anyone can predict a change of a few percent in the short term and be correct to within 10%. But where does that get you? Which one of these financial analysis publications told their readers something useful, like in 2007 there's a financial crash coming or 2009 invest heavily in bitcoin? None. Sorry, that was a bit ranty.

james1071 13y ago
Supply is not predictable as there will be substitutes.
- adamcanady 13y ago
  As in, other digital currencies or transactions? I think he was referring to the known supply produced by mining.
- simplemath 13y ago
  The ecosystem and brand awareness of Bitcoin is novel though. It will take a full transition from people becoming marginally aware of Bitcoin to comfortably trading in cryptos before a "replacement" even one with a better design - and IMO there hasn't been one yet - threatens or supplants BTC.

dllthomas 13y ago

It seems like since they're just quoting a maximum, higher should be safer. There can always be reasons it didn't hit the maximum, there shouldn't be reasons it exceeded it.

timothyjcoulter 13y ago

Aside from the widely fluctuating prices, it could easily reach that point. Looks like it's on its way down now. http://live.bitcoinindex.es/ http://live.bitcoinindex.es/