Three Ways to Value Bitcoin

As an Asset/Commodity

As a Technology/Network

  1. Speculation — every speculative dollar that trades in bitcoin increases the value
  2. Merchant Adoption — every new merchant that accepts bitcoin increases the value of the network
  3. Consumer Adoption — every time a new consumer can buy something with bitcoin the value increases
  4. Security/Incentives — as the speculators as well as merchant and consumer adoption raise the price, miners’ and nodes’ incentives are increased
  5. Developer Mindshare — as the moat around bitcoin increases so does the value
  6. Financialization — as more financial products, like options on cryptocurrency and insurance get created, there is more value added to the network
  7. Adoption as a World Reserve Currency — this one is off in the future, but as other fiat currencies collapse, the value of bitcoin increases. We’re already seeing that from events in Venezuela and countries in Africa.

As an Alternative Currency…/estimated-transaction-volume-usd

Key Drivers of Value



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Jake Ryan

Jake Ryan

CIO at Tradecraft Capital & Author of Crypto Asset Investing in the Age of Autonomy, published by Wiley