# Bitcoin Value Calculation

I'm trying to understand how a bitcoin is valued. In my mind, it seems like it can be broken down with some basic math. For instance, if there is \$50 trillion worth of "money" in the world and 1% of that money is in bitcoin, and there are 12 million bitcoins in existance, that would make a bitcoin 'worth' \$41,666.67 in the physical world.

Is that a correct approach to identifying its value if I wanted to convert to/from dollars? Or, am I missing something?

• You are missing a source for the fraction you assumed to be one percent. Why not 0.00000000001 percent instead, or maybe 99.99999 percent? Nov 29 '13 at 16:19
• It's speculation, based on computational costs and eminent scarcety, it is expected to valuate at \$0.01 USD per uBTC, or \$100,000 USD per BTC. The only requirement is that BTC become a de facto currency for 5-8% of global trade to have that much value. On the subject of determining a currencies value, you have to consider how much the world depends on it. Right now the value of BTC isn't based on demand, it's based on speculation. I still wish I had bought a few thousand when they were still < \$10 USD per BTC, I could have bought a house. Feb 12 '15 at 13:50