They quote a "Maximum fair market value" of $1300 based on a couple of different methodologies.
In my (limited) experience, when banks forecast prices (for stocks, indices, FX rates etc) they always quote a number within a reasonable-sounding percentage of the current price, because not to do so risks being wrong and looking stupid.
This means that most of the time they are not far out, and when it really matters (eg 2008) they are miles out (and so is everyone else).
So even if BofAML actually thought that the "maximum fair market value" was significantly higher than $1300, I doubt they'd have said so, simply to avoid the reputational risk.
Totally agree. This figure is ridiculous. I actually laughed out loud when I read it. Like anything the price is based on supply and demand. The supply is fairly predictable. The demand is a complete guess at the moment. A maximum market capitalization of $15Bn? Why? The 100 fold increase risks getting ahead of its fundamentals. What fundamentals? The nature of Bitcoin since its inception has been expotential growth. I'm not saying that will continue forever - it can't - but there's nothing to suggest that this rate of growth will stop when that value of a bitcoin reaches $1300.
Anyone can predict a change of a few percent in the short term and be correct to within 10%. But where does that get you? Which one of these financial analysis publications told their readers something useful, like in 2007 there's a financial crash coming or 2009 invest heavily in bitcoin? None.
The ecosystem and brand awareness of Bitcoin is novel though. It will take a full transition from people becoming marginally aware of Bitcoin to comfortably trading in cryptos before a "replacement" even one with a better design - and IMO there hasn't been one yet - threatens or supplants BTC.
It seems like since they're just quoting a maximum, higher should be safer. There can always be reasons it didn't hit the maximum, there shouldn't be reasons it exceeded it.
The CNY price dropped from around 7000 to below 5000 briefly, as I was watching it on www.bitcoinaverage.com. That's a 28% drop in a few minutes, which surely qualifies as a plunge. It does seem to be recovering, which makes sense since the announcement wasn't particularly aggressive.
We've seen similarly large drops as recently as two weeks ago. This kind of volatility is still normal for Bitcoin. I don't get why folks expect it to be more stable than it is right now. It simply can't be...there's too much new adoption and too much uncertainty and to much evolution happening in the market. We're going to see more drops like this in the future; we've seen it on no news, on more than one occasion.
Perhaps a different title wouldn't have been upvoted sufficiently to get us all reading about and discussing the issue. It strikes me there's a strong element of direct marketing in getting from the New page to the front page. Once you're on the front page, of course, your content speaks for itself.
Am I missing something significant? If my wayward indebted 19 year old (not that I have one of those currently) can get hold of the encrypted key, he can take its money. So I'm putting total trust in the security/honesty of the lawyer or whoever who is storing the protected key. So they might just as well be storing the unprotected private key. I'd rather not put total trust in anyone, but reasonable trust in several (disinterested) people.
In my (limited) experience, when banks forecast prices (for stocks, indices, FX rates etc) they always quote a number within a reasonable-sounding percentage of the current price, because not to do so risks being wrong and looking stupid.
This means that most of the time they are not far out, and when it really matters (eg 2008) they are miles out (and so is everyone else).
So even if BofAML actually thought that the "maximum fair market value" was significantly higher than $1300, I doubt they'd have said so, simply to avoid the reputational risk.