Wieviel ist Bitcoin Wert?

In part six of our Bitcoin Basics series, we looked at whether Bitcoin is money . In part seven, we want to look at what Bitcoin is actually worth. 

When Bitcoin was founded based on Satoshi Nakamoto’s white paper and the Genesis Block was mined, the cryptocurrency was sold at $1c USD per 1 BTC.

What is Bitcoin’s current value?

Bitcoin’s price has risen dramatically over the past three years, which in turn has led to media hype and countless speculations. This in turn has done nothing but make all cryptocurrencies now surrounded by an aura of curiosity about the unknown. In 2018, the Bitcoin price fell drastically and since then the token has been constantly trying to break through in the markets and gain more support there. 

Where does the value of Bitcoin come from?

The recent price increases of Bitcoin may give the impression that cryptocurrencies are a “bubble” in which new money is simply created artificially and investors can make quick money by investing minimal amounts in Bitcoin and receiving maximum profits. 

But that is not necessarily the case. Bitcoin’s value is determined by the investment and use of the currency by the community. It is maintained by the distribution of new Bitcoins to the market through the process of mining.

As we explained in Is Bitcoin Money?, value is determined by a currency’s ability to serve as a store of value, a medium of exchange, and a unit of value. In other words, if people all over the world suddenly stopped using the US dollar and declared it worthless, the value of that currency would plummet because no party would want to own or trade that currency.

Bitcoin price increase

The first significant price increase of Bitcoin came in 2011, when the cryptocurrency reached an approximate value of $1 USD to 1 BTC. At that time, widespread media coverage of the currency’s success attracted more and more users. This in turn led to an unimaginable price increase of $30 USD per 1 BTC before the inevitable crash occurred. After that, the price had fallen back to $2.

Bitcoin has already experienced such a sharp price increase three times. Typically, new investors buy Bitcoin (which means the currency is worth more in USD the more popular it becomes) while already planning an exit strategy.

For example, an investor might buy bitcoins when the cryptocurrency reaches a trading value of $1 USD, with the intention of selling once the bitcoins reach a value of $30 USD. Once the investor sells everything again, he will have ideally made a 30x profit.

Every time this process has repeated itself in the past, the media has paid a lot of attention to the ups and downs of the Bitcoin price. The novelty of the cryptocurrency, the interesting technology behind it and the willingness of investors to buy the currency have led to Bitcoin being dragged into the media spotlight again and again in the past. This means that as Bitcoin becomes more “public” (or accepted), the value of the currency will continue to rise.

Ultimately, Bitcoin’s value will also be determined by the use of the currency. Since 2009, Bitcoin has established itself as a kind of “digital gold”. Investors buy shares (Bitcoins) and expect to be able to resell them later at a profit as soon as the value of the shares has increased.

As a network for person-to-person transactions, Bitcoin could be most useful if it were used as a currency to pay for goods or services. In recent years, large corporations such as Microsoft and Paypal have also accepted Bitcoin as a means of payment. This means that as the cryptocurrency becomes more widely used as a means of payment, its value may increase even further.

How much will Bitcoin be worth in the future?

Investors and experts around the world are debating how much Bitcoin will be worth in the future. To put it simply, we cannot set a specific value for the future.

Because Bitcoin is a person-to-person currency based on cryptography, it has traditionally been classified as a speculative investment. Ultimately, it will be up to investors, governments and institutions around the world to determine the value of Bitcoin by signaling their approval of a purchase or use of the currency as a means of payment. 

Bitcoin has enormous potential to function as a decentralized global network through which parties can complete transactions and payments in less than 5 minutes. The fact that Bitcoin does not involve government or central bank interference means that Bitcoin is not necessarily subject to the same political or societal pressures that might determine the value of a flat currency or precious materials like gold.

The Value of Bitcoin Consensus

Bitcoin’s value is determined by consensus – the agreement of various parties around the world to accept Bitcoin as a store of value and medium of exchange. This consensus will ultimately determine how much each Bitcoin is worth.

Bitcoins offer a different perspective for every person. Billionaire investors like John McAfee have already publicly announced that they believe that one Bitcoin will be worth a million US dollars before the end of 2020. Others, like Warren Buffet, believe that Bitcoin is just a bubble that will not generate much profit in the near future. 

On a middle ground between these opinions, investors will establish their own exit strategy, where they are prepared to leave all profits generated to the market or the “bank”. 

These aspects, combined with increasing awareness over time, will ultimately determine the price of Bitcoin. Then people around the world will either accept Bitcoin as a new payment standard or completely replace the currency in favor of another cryptocurrency, a flat currency or valuable commodities.

Will Bitcoin fail?

Hypothetically, there could be future scenarios in which the value of Bitcoins evaporates and the currency is no longer accepted. But it could also happen that Bitcoin will be used as a marginal currency for exchanging other flat currencies or that Bitcoin will become a globally accepted payment standard. 

In the near future, the value of Bitcoin will be determined primarily by the willingness of various parties to accept the cryptocurrency as a means of payment and the willingness of institutions, central banks and governments to either invest in the currencies or accept their use. 

In part 8 of our Bitcoins Basics series we will find out how to buy and sell Bitcoins .