How Much Is Bitcoin Worth (And How It’s Determined)

You can look up the price of any standard currency.

In a few seconds, you can see what your dollars would be worth in pounds, pesos, or yen.

But what about Bitcoin?

How can you find out its price? And perhaps more importantly, what’s the real VALUE of Bitcoin? Is it worth the hype, or is the current valuation overblown?

In this article, you’ll learn the price of Bitcoin, what the experts are saying about its future, and what you can expect from the digital currency in the years to come.

Let’s jump in!

The Current Price of Bitcoin

Let’s start things off with the question we started with. What’s a Bitcoin worth?

This is something you’ll want to be well-aware of before you buy Bitcoin or sell it.

Right now, a Bitcoin is worth this much in US dollars:

[SCRIPT]

If you’re looking for a simple answer, that’s the number you’re looking for.

Of course, the number changes from day to day.

Tomorrow’s price will be different than yesterday’s price — but overall you can expect the valuation to stay roughly the same.

While Bitcoin has had problems with price fluctuation in the past, it currently only has about 2% volatility today. That’s roughly the same as the Mexican peso.

In short, the price of Bitcoin isn’t going to fluctuate wildly every minute, as it did when it just started.

It’s also worth noting that Bitcoin is looking to have a more and more stable future, rapidly taking over other mainstream financial institutions in market cap.

Market cap is short for market capitalization, or the total amount of money a company’s shares are valued at. In the case of Bitcoin, it represents the total value of all Bitcoins.

Let’s look at one of the more established companies in the financial industry: American Express. Currently, the market cap of American Express hovers around $81 billion.

pasted image 0 39

But it’s no secret that the internet has changed the way we deal with money. Newer companies have started to gain prevalence. How do they stack up?

Let’s look at the biggest player in the new market of internet finances: PayPal. Currently, the PayPal market cap is 80.67 billion, just shy of that of American Express.

(In fact, the two have been trading places over the last few weeks.)

pasted image 0 33

Clearly, those market caps are huge. But even PayPal and American Express are still lagging behind Bitcoin.

Instead of a mere $80 billion market cap, Bitcoin’s market cap is teetering on $94 billion at the time of this writing.

pasted image 0 34

If we look at the numbers, it’s clear that Bitcoin is moving up with the established players in the financial market.

But of course, Bitcoin isn’t just looking to become the next PayPal. It’s designed as a currency. So let’s be fair and compare it to other currencies.

Under the harsh scrutiny of international money, how does Bitcoin hold up?

Over the course of 2016, Bitcoin was the currency that increased the most over the USD.

pasted image 0 40

And in 2017, its value continued on an upward trend.

bitcoin 2017 fluctuation 1

It’s quickly growing in usefulness around the world as more and more people start to use Bitcoin as a currency.

In fact, one of the biggest potential uses for Bitcoin is international money transfers, since you can move money across borders without fees or fines.

This means that the increasingly global economy is a good thing for Bitcoin, as more users internationally increase its value.

But to tell the truth, Bitcoin’s price doesn’t tell the whole story. To understand the real facts behind the number, we need to dive a little deeper.

What the Bitcoin Price Really Means (And How to Buy Bitcoins Without Spending Thousands)

If you’re wondering how much a single Bitcoin is worth, you might be discouraged by the result.

A single Bitcoin costs thousands of dollars, but you don’t have thousands of dollars to spend!

But the truth is that you don’t have to buy an entire Bitcoin. In fact, most of today’s investors in Bitcoin aren’t purchasing them one at a time.

Instead, you can buy fractions of a Bitcoin. Just like you can divide a dollar up into cents or purchase part of a stock, you can also divide up a Bitcoin.

In fact, Bitcoins are far more divisible than dollars. Rather than just divided into 100 cent pieces, Bitcoins are divided into 100 million pieces, known as Satoshis.

pasted image 0 43

(Satoshi Nakamoto was the creator of the original Bitcoin concept and software, and the smallest denomination of Bitcoins is named likewise.)

No matter how much you want to buy, there is a decimal quantity of Bitcoins you can purchase for the money you have available to invest.

But should you even invest? Let’s look at what the experts have to say.

Future Predictions of Bitcoin, According to the Experts

To start with, you should know that most of the people talking about Bitcoin have invested in Bitcoin itself or Bitcoin-related products and services.

And when you’ve invested in Bitcoin, you have a motivation to get people interested in the currency. Many experts touting Bitcoin have something to earn by giving it a high valuation.

But it also shows that they’re willing to put their money where their mouth is. It’s helpful to see that these investors are willing to stake their own dollars on Bitcoin’s success.

The first person to look to is John McAfee, the creator the software that still bears his name. He’s moved on from security software and into Bitcoin investment and management.

In July 2017, McAfee stated on Twitter that he fully expects Bitcoin to reach a $500,000 valuation per coin in three years.

Another respectable expert in the space is Jeremy Liew, the first investor in Snapchat who is currently focused on Bitcoin.

He worked with the CEO and founder of Blockchain, a large Bitcoin company, to analyze Bitcoin’s future. Using multiple factors, they predicted a $500,000 valuation by 2030.

But as I mentioned earlier, both McAfee and Liew have something to gain with a positive Bitcoin projection.

Are there financial experts who aren’t deeply in involved in Bitcoin pointing to it having a positive future?

The answer is yes. Let’s take a look at recent statements by two major players in the financial industry–the CEOs of Morgan Stanley and Goldman Sachs.

Neither has come out with a precise number, but they’ve both said some pretty positive things about Bitcoin.

Morgan Stanley CEO James Gorman has indicated some support of the currency, calling it “more than just a fad.”

Meanwhile, the CEO of Goldman Sachs compared Bitcoin to the introduction of paper money.

When viewed in this light, it looks like Bitcoin has a bright future.

Even experts who don’t have a stake in Bitcoin’s future seem to be saying positive things, or at least remaining neutral.

This indicates that Bitcoin has strong potential for continual growth in the years to come.

But let’s not stop with the expert projections. Let’s take a hard look at how Bitcoin stacks up when compared with the market factors that will influence its price in years to come.

The External Factors That Influence Bitcoin’s Price

Let’s spend a moment and examine the changes that control Bitcoin’s price. Of course, there are plenty of factors, and they’re constantly changing.

But if we have a general sense of where the price is going, we can predict what to expect from Bitcoin in the coming years or decades.

First off, Bitcoin is largely influenced by the big authorities in the financial space. Those are primarily banks and investment firms.

As we mentioned earlier, many of the most influential players in finance seem open to Bitcoin, or at least ready to see what will happen with the currency.

This is a good sign, as it shows more mainstream acceptance. People were unsure about PayPal when it first arrived but has gradually taken its place as a new standard.

Bitcoin seems to be following the same trajectory, which is encouraging.

The second place to look is how widely accepted Bitcoin is becoming. Since it’s designed as a currency, the number of people accepting it works as a virtuous cycle.

That is, the more retailers and websites accept Bitcoin, the more people will use it. And the more people that use it, the more stores will want to accept it.

Viewed in this light, Bitcoin is on a huge upward trend. Unsurprisingly, tech companies were at the forefront of the shift. You can use Bitcoin at DellMicrosoft, Intuit, PayPal, and DISH.

But other retailers are catching on. Overstock.com accepts Bitcoin payments for all orders and is clearly visible on the checkout page.

pasted image 0 29

In short, this trend is moving steadily upwards to reach more and more consumers.

There’s a third factor that will influence the price of Bitcoin in coming years, and it’s perhaps the hardest to predict: regulatory bodies.

Ultimately, the governments across the world have the right to limit or even ban the use of Bitcoin, and some have already done so.

No matter what banks think, or which retailers accept the currency, the government has the final word.

So when we look at the primary players in the western Bitcoin space, what do we see? By and large, most western nations are fine with Bitcoin.

In the United States, Bitcoin is legal, though not regarded by the Internal Revenue Service as currency. Instead, it’s taxable as a property like most other things you can buy.

This bodes well for Bitcoin use in the west. With the government seeing Bitcoin as a form of tax revenue, it’s unlikely that it will suddenly ban the currency.

But in the end, the future is best predicted by looking at the past. How has Bitcoin fared over the years?

The truth is, quite well.

Bitcoin’s Growth

Let’s dive deep into how much Bitcoin is being used. In the early days, Bitcoin struggled to get off the ground.

While it was present on underground markets and websites selling drugs and other illegal goods, it didn’t gain mainstream acceptance.

The first use of Bitcoin for a “real” transaction was when it was used to buy two pizzas in 2010. It cost 10,000 Bitcoins–worth about $57 million in October 2017.

pasted image 0 31

But despite its difficult beginnings, Bitcoin has taken off since 2010. It’s gaining more and more acceptance, as we saw earlier.

When you look at the numbers of its growth, the results are truly staggering. Almost every month, Bitcoin transactions are increasing. Every few years, the growth is exponential.

For proof, one need only examine this chart of Bitcoin transactions per month. The scale is logarithmic, meaning each section represents 10x the section before it.

pasted image 0 38

In other words, Bitcoin usage grew ten times from 2009 to 2011, another ten times from 2011 to 2012, again from 2012 to 2013, and again from 2013 to 2017.

It shows no sign of stopping. That’s why there are some exciting conclusions about its projected growth when compared with other investments.

How Bitcoin Stacks up Against Stocks

Of course, nobody can accurately predict the future price of Bitcoin. But many have tried, and their results are incredible.

If we look at the overall trend of the price of Bitcoin when compared to the US dollar, the valuation is on a steady trend upwards.

In fact, it shows a significant lift in price that bodes well for investors everywhere.

pasted image 0 32

The results are even more staggering when you compare it to other investment opportunities. After all, the money you put into Bitcoin is money you can’t invest elsewhere.

So is it worth it to put your money into Bitcoin?

When compared with the forecast for the S&P 500, Bitcoin shines. The S&P is expected to take a dip at the beginning of the year, rising back up a little bit above its current price.

pasted image 0 37

Not too bad, and the S&P 500 is a safe investment that involves little risk. But the returns in the short-term aren’t expected to be too great.

(Long-term, it’s impossible to predict with any accuracy. It’ll be far riskier to predict, but could have higher or lower gains.)

When we look at the projections for NASDAQ, we see roughly the same forecast. A slight dip at the beginning of the year, and a rise a bit above current levels.

pasted image 0 36

Both the S&P 500 and NASDAQ are established investments that are likely to show steady returns. Of course, things happen, and stocks can crash.

But the forecasts show a modest return, which can be a good outlook for investors. When compared to Bitcoin’s short-term projections, however, they pale in comparison.

Now let’s see how Bitcoin stacks up against some very popular stocks, had you invested in them five years ago.

Let’s start with the poster child of internet company stocks: Google.

If you had invested $1,000 in Google stock (now Alphabet, Inc.) back in 2012, what would you have five years later?

Around $2,968, based on the most recent stock price. That’s almost a 3x gain! Not too disappointing, and certainly nothing to complain about.

pasted image 0 42

What if you had the foresight back in 2012 to invest in another technology company that was set to change the face of purchasing online–perhaps forever?

If you have invested in Amazon stock back then and waited for five years, your investment would have quadrupled.

A $1,000 investment would have turned into $4,154. That’s a huge return that any investor would be thrilled with.

pasted image 0 35

But since we’re being hypothetical, what would have happened if you had instead invested that $1,000 in 2012 in Bitcoin?

The results speak for themselves in the chart of Bitcoin’s growth since 2012.

pasted image 0 30

Specifically, your paltry $1,000 would have grown by over 50,000%, giving you an insane $513,552.

If you had invested two thousand dollars instead of one thousand, you would be a millionaire now.

The past doesn’t lie. Bitcoin’s meteoric rise has made it a major player in the world of finance, and there is legitimate money to be made from investing early.

In fact, in late 2016, Bitcoin’s market cap overtook Silver, SpaceX, Twitter, and Dropbox.

pasted image 0 44

The trend has continued since then. A number of potential events could take place with Bitcoin, pushing the market cap closer to that of gold.

With just a few percentage points closer to gold, a single Bitcoin could be worth as much as $800,000.

pasted image 0 41

As Bitcoin becomes more appreciated across international markets and in established industries and businesses, the market cap will continue to grow.

That being said, Bitcoin is still a different type of investment than these more traditional options — so if you decide to buy, we recommend that you take a look at our Bitcoin Tax Guide.

The Final Word: How Much Is a Bitcoin Worth?

If you’re wondering how much a Bitcoin is worth, look no further.

The current price of Bitcoins changes hour to hour, just like other currencies. As it grows in acceptance, it’s becoming more and more stable and only changes about 2% today.

If you don’t want to buy an entire Bitcoin, you don’t need to worry. There are fractions of Bitcoins, down to one-hundred-millionth, known as a Satoshi.

Just like you’d exchange a certain number of dollars for whatever the equivalent is in yen or euros, you can invest in Bitcoin with any quantity of money.

The future of Bitcoin is looking up, and the factors that influence the Bitcoin price are growing less significant as it becomes more mainstream.

If past records are any indication, Bitcoin is projected to continue to grow in the coming months and years. Compared to other stocks, it’s an incredible deal at its current price.

While nothing is certain, Bitcoin has a promising future ahead of it, and it’s best to start investing sooner rather than later.

And if you’re still confused, not to worry — you can check out our Bitcoin 101 (Beginner’s Guide to Bitcoin) guide to learn everything you need to know before investing in the currency.