Bitcoin’s Value Is All in the Eye of the ‘Bithodler’

The total market value of bitcoin crossed $1 trillion on Friday as the price surged above $55,000.

Passionate backers are fond of saying the digital currency is on a trajectory “to the moon.” For the less faithful, determining bitcoin’s value is much more complicated.

Bitcoin has skyrocketed since the beginning of 2020 when it was trading around $7,000. A steady stream of institutional demand has been credited with driving much of that rally. Billionaire hedge-fund managers disclosed purchases: Paul Tudor Jones called it a “great speculation.” A handful of companies, most notably Tesla Inc., recently started buying it for their corporate reserves.

Yet determining a fair value for bitcoin is much harder than valuing stocks, investors say, both because bitcoin isn’t a traditional asset and because much about it is misunderstood.

“It’s a difficult asset class to value,” said J.P. Morgan analyst Nikolaos Panigirtzoglou, who estimates the value of one bitcoin could be as little as $11,000 or as much as $146,000.

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