What sort of variables go into a model used to determine the price of something like bitcoin? And by "something like bitcoin" I mean something with no value beyond the trust people place in it. How do you determine a "true" value of something like that?
A supply-side model kinda sweeps all that under the rug. If everything else stays the same, and the difficulty of mining increases, the model predicts that the price will rise proportionally. Since it's rising really fast, that means something has changed on the demand side.
Ah, there's the kicker: "if everything else stays the same". Definitely not the case with the news going more and more crazy about bitcoin every time it spikes.
