7 Methods for Valuing Bitcoin: A Guide to Understanding Its Worth

Ned Davis Research's chief alternatives strategist, John Laforge, has outlined seven distinct approaches to valuing Bitcoin in a recent note. Each method is suited to different circumstances and comes with its own weaknesses.

The methods include network adoption, comparison to similar assets like gold, money-supply growth, cost of production, risk-based position sizing, adoption cycle analysis, and stock-to-flow models.

Laforge considers network adoption the most suitable method for Bitcoin, as it tracks direct and ETF-based ownership, along with addresses holding a balance and transacting daily. This approach answers different questions than others, such as comparison to gold or money-supply growth.

Ned Davis Research's own long-term price targets see Bitcoin reaching around $170,000 by 2030 and as high as $230,000 by 2035. However, Laforge is skeptical of the stock-to-flow model, noting its recent track record has missed by hundreds of thousands of dollars.

If money-supply growth data or ETF and address-level adoption figures move meaningfully in the coming months, it would test Laforge's view on which methods matter most right now. A sustained period where Bitcoin's market price pushes below the miner production-cost estimate of roughly $75,500 could signal potential miner capitulation and a possible cycle low.