The Theoretical Price Limit of Bitcoin

Permit me a very simple mathematical observation.

In my previous post I pointed out how bitcoins were more like diamonds in that there is a limited supply of them, and bar some industrial uses, really have no practical value.  Ergo, if you want to compare the value of diamonds to dirt, diamonds are valuable because they are scarce and dirt is cheap because it is not.  This ratio of "diamonds to dirt" would by math give you the exchange rate.

So, why not dollars instead of dirt?

You can choose your poison of which measure of the US dollar supply you want to use, but since bitcoin is only going to have 21 million units produced you can calculate their theoretical dollar exchange rates quite easily:

M1 Money Supply - $2.6 trillion
Implied Bitcoin Value = $123,809

M2 Money Supply - $10.974 trillion
Implied Bitcoin Value = $521,319

For this super awesome economic analysis you can read one of my books.
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