Global Macro Investor author Raoul Pal has priced online payment system Bitcoin at $1 million, suggesting the company seems to continue growing.
"I did some analysis a while ago. It was to try and create a valuation framework that gives some value to Bitcoin because nobody really knows that it's worth," Pal said during a recent interview, according to Business Insider.
"So I said OK well let's assume it's something like gold-There's a finite amount of it. There's a finite amount that's been mined. The rest is underground. We kind of know how long it's going to take before all the gold is mined or before all the Bitcoins. Put them in the same kind of equation we get a value of Bitcoin and that value is a million dollars. Now, you'll never hear an analyst say this-but I don't mind this-I could be wrong by 90%, and it's still worth $100,000."
Bitcoin has been at the center of debate over alternative forms of currency and trade since its 2009 introduction. On one side, some claim the new software-based online payment system grants consumers more authority and autonomy in their choices of exchange. On the other side, critics express concern over its legitimacy and compliance with federal authorities.
During his interview, Pal also addressed concerns over Bitcoin's frequent change in price: he believes its upside is "astronomical" compared to the downside, Business Insider also reports. Pal recommends buying Bitcoin because of the likelihood of federal notes from the Central Bank losing legitimacy.
Bitcoin is well known for its peer-to-peer administration system and has been labeled as decentralized virtual currency by United States government officials. It has also, however, been heavily regulated by other countries, including China.
