Seba, a Switzerland based bank, is proposing a Bitcoin valuation model that places its fair value at $10,670. At this price, the model suggests Bitcoin is trading at a significant discount, at just above $9,100.
In a blog posting this past Thursday, Seba says the model’s estimate relies on the same concepts as other valuation models. It draws comparisons with the FX space.
“In the FX space, for instance, Purchasing Power Parity (PPP) and Uncovered Interest Rate Parity (UIP), two models based on sound concepts, provide estimates challenged by empirical evidence,” the blog post points out.
Yet, in spite of lacking empirical support, such currency valuation models “shape and form the basis of investors’” understanding of the FX market.
Furthermore, the models help explain where currency “value originates in a fiat money world” where none of the currencies have “intrinsic value.”
Seba tries to contrasts the findings of its model valuation with well-known Bitcoin valuation models. As the blog posting further claims, other valuation…