So how would you go about it? Can you please share your structure?
How would you valuate Bitcoin?
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Hi!
Similar to other typical McKinsey price factors cases (factors influencing Oil Prices, Real Estate Prices, etc) you should approach it with the supply - demand framework:
Supply factors:
- Volumes of bitcoins mined
- Upper cap on the total number of bitcoins
- Tech specifications of the system (Forks, etc)
- R&D explored innovations - potential to increase the speed of bitcoin transactions to compete with Visa / Master Card
- Speculation
Demand Factors:
- Volume of transactions
- Number of people holding bitcoins
- Availability of exchanges
- Bitcoin adoption by payment systems, banks, sellers
- Availability of alternative coins (Ripple, Bitcoin cash, etc)
- Regulation (Taxation, restrictions, etc)
- Speculation
- Economy and prices for alternatives (Gold, real estate, etc)
Best!
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