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The value of Bitcoin dropped during the period of President Trump's re-election. Photo: Wired . |
Strategy founder Michael Saylor once posted a message on social media: "If necessary, sell a kidney. But keep Bitcoin."
However, the latest developments show that even the company he leads has had to sell off some of its Bitcoin holdings.
When the promise to "keep it at all costs" is no longer valid.
This week, Strategy announced it had sold 32 Bitcoins. According to Bloomberg , although this is only a very small fraction of the company's total holdings of 843,700 Bitcoins, the move has attracted attention because it goes against the "buy and hold at all costs" image that Saylor has pursued for many years.
According to Strategy's explanation, the proceeds will be used to support dividend payments on the perpetual preferred shares the company has issued.
Behind this transaction lies a noteworthy fact: Bitcoin is increasingly deviating from the original goals described in the white paper of its founder, Satoshi Nakamoto.
In a document published in 2008, Bitcoin was introduced as a peer-to-peer electronic currency system, allowing transactions to be conducted directly between individuals without the need for intermediary financial institutions.
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Strategy announced it sold 32 Bitcoin to pay dividends. Photo: Bloomberg. |
However, after nearly two decades of development, Bitcoin's role in payments remains quite limited.
If Bitcoin truly becomes a widely used means of payment, Strategy could use the currency itself to fulfill its financial obligations instead of having to sell Bitcoin and convert it to USD to pay dividends to investors. This highlights a significant gap between Bitcoin's initial vision and its current reality.
Although the narrative surrounding Bitcoin has evolved over time—from a means of payment and an inflation hedge to a new investment asset—the cryptocurrency's original goal remains to be currency. Even today, Michael Saylor still calls Bitcoin the world's dominant digital currency network.
What is the true value of Bitcoin?
If Bitcoin's value truly comes from its monetary function, the question is how much it's worth based on its actual usage.
Economist John Lewis of the Bank of England attempted to answer this question in a study published on the Bank Underground blog.
According to Lewis, the value of Bitcoin as a means of payment depends on three main factors: the total supply of Bitcoin in circulation, the total value of transactions conducted using Bitcoin, and the speed at which the currency circulates in the economy.
However, current figures suggest a less than optimistic outlook.
Approximately 60% of the circulating Bitcoin supply has not been traded in the past year. At the same time, according to Lewis, Bitcoin has seen virtually no significant growth as a means of payment since the late 2010s.
Even in El Salvador – the first country to recognize Bitcoin as legal tender – the digital currency is used in less than 5% of transactions and accepted by fewer than 20% of businesses.
Based on these assumptions, Lewis's valuation model suggests that Bitcoin is worth only a few thousand dollars per coin if considered purely as a means of payment. He also argues that Bitcoin's current valuation is inconsistent with its very low actual usage.
Of course, Bitcoin proponents might make more optimistic assumptions.
If Bitcoin reaches the transaction volume and flow rate of the Visa network, the fair value of each coin could rise to around $34,000 . If Bitcoin replaces the entire global electronic payment system, the valuation could reach $619,000 .
However, the likelihood of these scenarios becoming a reality is very low.
Since the advent of Bitcoin, traditional payment technology has made significant strides. Domestic and cross-border transactions are now processed much faster than they were in 2008.
Meanwhile, stablecoins are emerging as a more suitable option for payment transactions due to their faster processing speeds, 24/7 operation, and lower price volatility compared to Bitcoin.
According to Lewis, even in a scenario where Bitcoin continues to be used primarily for activities outside the traditional financial system, its current value is still significantly higher than its intrinsic value.
With Bitcoin having fallen by approximately 37% over the past year and US-listed Bitcoin ETFs recording net outflows of nearly $4 billion in just the last few weeks, part of the reason may stem from the fact that the world's largest cryptocurrency is currently overvalued by the market compared to the role it was originally created to play.
Source: https://znews.vn/bitcoin-thuc-su-dang-gia-bao-nhieu-post1658112.html
