The main difference i see between bitcoin and a regular commodity is that a regular commodity's price is aligned around production cost, whereas bitcoin is the other way around which is the production cost gravitate around the demand's price.
I think a regular commodity's price is always aligned not with production cost but with demand, so that the production cost may remain constant while the price rises and falls. Moreover, even if the production cost goes through the roof, without demand, the price would still be falling. The same is basically true with Bitcoin.
So thats the eternal question around bitcoin is what is supposed to be the "right" price for it ?
Is there such a thing as
right price for Bitcoin? I mean, outside the realm of demand? I think there's none. The market determines the price. Of course, there are certain factors that affect the demand such as Bitcoin's scarcity, government regulations, competition within the crypto market, crumbling fiat, and so on. But everything will boil down to demand or how much people would be willing to pay for it.
My reasoning is that instead of asking this question peraphs the good question is how to know if it is overpriced ?
Well, there are certain technical tools for it. There's Williams %R, Bollinger Bands, RSI, and numerous others, which I am not really a fan of. Fundamentally, though, if only a handful of wealthy investors like the Hunt brothers are buying in massive amounts, hoarding, while the rest are selling, taking advantage of the exponentially rising prices, the price is probably a bubble.
And the answer would be another question, how do you inflate artificially a commodity market ? By people with too much monney hoarding it to expect the price to rise and making more profit out of it than just exchanging it as utility as a regular use.
If you're asking about artificially increasing the price of a commodity, then hoarding is a time-tested strategy. If there's a regular use of it which results to the increase of price, then I guess it's not anymore artificial.
With this reasoning people with lots of monney hoarding expecting to make a profit would end as the Hunt brothers.
The circumstances surrounding the case of the Hunt brothers are different with Bitcoin's. It was more like the Hunt brothers and certain partners versus the United States government. In no way, could the Hunt brothers succeed. Whatever success was definitely temporary. It couldn't be sustained. Not to mention that the production of silver was continuous.