Bitcoin Is Just Like Gold Except When It Isn’t - Las Vegas Version

For many equity and fixed income investors the only real investments have cash flows. Bitcoin is an example of an "investment" that does not have cash flows and therefore it is easy for equity and fixed income investors to dismiss Bitcoin out of hand. However, it is possible to use the same ad hoc "equation of exchange" mental framework used to popularize the quantity theory of money and various versions of the equity CAPE model to explore the valuation of gold and Bitcoin. Bitcoin "halving" is an example of the triumph of hope over experience, similar to the belief among some equity investors in the existence of a "January effect". Metcalfe's Law offers some tantalizing insight into the valuation of Bitcoin, but only as a "vision thing"