This is today's news. This reminds me of the past JPMorgan Chase executives' judgments on Bitcoin. When it rises, it is good, and when it falls, it is not good. After repeated repetitions, they simply take a neutral attitude. Basically, the thinking of our retail investors has completely gone through the cognition of well-known institutions. However, even so, JPMorgan Chase is still a world-renowned financial institution, and its remarks are still of reference significance, and we have to read some useful information from them.

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The simple Chinese description above: Coindesk said that this report was issued by JPMorgan (JPMorgan Chase) to their private banking customers in February. Coindesk got it last Friday. Private banking customers need to have an account of 10 million US dollars deposit. It can be seen here that the author of the two pieces of information Coindesk and myself are not private banking clients of JPMorgan Chase, otherwise the article should have been published in February (just kidding).

The image above is from a Coindesk article:《JPMorgan Sends Its Private Clients a Primer on Crypto》，

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Bitcoin Valuation Methodology

There are three valuation methods:

• Metcalfe's Law Valuation

Metcalfe's law: The value of a network is equal to the square of the number of nodes in the network, and the value of the network is proportional to the square of the number of connected users. That is, the value of the network V=K×N^2. K is the value coefficient, and N is the number of users.

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Picture from BTC.com

There are many addresses that have not been active in the past three years, and the addresses of many large accounts are even more inactive; many people just open accounts on centralized exchanges without real bitcoin addresses, etc. Therefore, valuing Bitcoin from the number of users cannot give an accurate conclusion, but paying attention to the number of active addresses, the Google search index, and the number of users is also a reference for Bitcoin holders.

• Gold Valuation Comparison Method

The current value of gold refers to the value of all the gold that has been mined, excluding the unmined part, let alone the part of gold derivatives. The total value of derivatives is much higher than the total value of physical gold. Of course, you can also say that the futures market, options market and other derivatives markets have a greater trading volume of Bitcoin. Therefore, the value of the spot stock of gold can be used as a reference for the value of the spot stock of Bitcoin.

But one thing is this. In the early days of Bitcoin (such as before 2011 or 2010), due to the extremely low price, many early participants did not care about the custody of private keys, and a considerable number of Bitcoins have been permanently lost. The industry generally believes that at least 3 million bitcoins have been lost. In other words, there are at most 18 million bitcoins out of 21 million, which is 14%-19% less.

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The actual valuation of Bitcoin under this model should be: $62,000

• Global Money Supply Comparison Method

The method for applying a global currency to the maximum supply of Bitcoin is not complete. The reasons are as follows:

a. The total amount of global currency is constantly changing, and most of the time it is growing;

b. There are often deviations in the total statistics of global currencies, and the upper limit of 21 million bitcoins will not change.

Similarly, the real circulation of Bitcoin is lower than 21 million, so the price needs to be increased by about 15%, 1.904 million US dollars multiplied by 1.15 = 2.19 million US dollars

If this valuation model is established and realized in the future, one bitcoin just buys a good house.

Of course, there are also valuation methods using the stock market, silver, oil, etc. Among them, comparing the market value of the company with the market value of BTC is the most common.

These models only provide us with an idea, and the logic is not complete. We can only continue to explore from different valuations. However, one thing can be known from the documents of JP Morgan Chase: Bitcoins below 20,000 US dollars are estimated to be difficult to see in the short and medium term. Cherish the bargaining chips in your hand and don't run away because of short-term fluctuations. This is the most important thing to do in the past two months.