I’m using the words “model” and “nailed” a bit loosely. It was one time, and it was more a logical guess than a prediction, but the method I used  in June 2018 to estimate bitcoin’s “value” at $3,142 sure was scary close to the actual bottom that it found six months later at $3,120. 

Maybe sounds ridiculous, until you remember that’s what happened to crude oil. The key point of the analysis is that the crypto crash of the past year has hit bitcoin harder than the broad market, and that’s a big difference compared to the bear market of 2018.

That actually makes quite a bit of sense. Bitcoin’s failure is very obvious compared to other crypto assets because most tokens don’t even purport to have a purpose other than speculation. The crypto community did, however, spend five years making a specific promise that bitcoin would be an inflation hedge akin to gold. Since inflation bottomed last year, bitcoin’s down 60% and gold is only down 7%. So it’s looking pretty unnecessary. 

It also seems reasonable to think the true value of all of crypto might be around $48 billion. That’s the size of Nintendo. From what I can see so far, nothing in crypto provides as high-quality a product or service as one of the world’s biggest gaming inventors. To be honest, it seems like an aspirational goal.

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