JP Morgan on Bitcoin's "quantifiable intrinsic value" (yes, really)
Via a note from JP Morgan on the leading cryptocurrency, BTC:
- Hayes (2016) suggests that Bitcoin does indeed have a quantifiable intrinsic value and formalizes a pricing model based on its marginal cost of production
- 'mining,' or the process of creating new Bitcoins through concerted computational effort requires the consumption of electric power, which incurs a real monetary cost for mining participants, and thus the value of Bitcoin is the embodied costs of production (on the margin).
I'm sympathetic to this view but unconvinced. I'm not sure its of much relevance given the price is above US$32,000 as I update anyway.