San Francisco Fed analyst: judging by mining costs, the actual price of Bitcoin makes $1800

Bitcoin is backed by mining - for some observers, this explains it big price. The United States Federal Reserve branch in San Francisco has apparently decided to check this argument for validity, as while $7400 is no $20,000 we have seen in December, it’s still a big sum.

The report published on May 18 claims that the real value of Bitcoin is approximately $1800. The sum is backed by the estimations of the mining costs in China - as the author tells, 80% of mining is being done in this country.

Other interesting remarks made by Joost van der Burgt include the comparison of Bitcoin price motion large-scale stats to those cases which have historically proven to be economic bubbles. This notion is expectable: many economic experts would agree with the FRB fintech policy advisor on this matter. Also, Bitcoin is called an economic object which possesses separate features of securities, commodities and currencies simultaneously. The report contains a disclaimer that the position of the authors of the paper may not directly reflect the FRBSF views on finance.

This Federal Reserve Bank has already made another peculiar research paper regarding the launch of Bitcoin futures and the following consequences for the price of this cryptocurrency.

Image: Greentech Media