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Questions surrounding the value of Bitcoin arise from time to time as the world attempts to make sense of the virtual commodity. Recently, Michael Novogratz made a very bold statement on Twitter. In response to a tweet, he claimed that BTC would never get to $100 and that if it would, that would be the end of Bitcoin.

If $btc goes to $100, it is game over. IT WON’T. It’s already established itself as a store of value. Stop wasting your time with these tweets and go outside and enjoy the summer. $btc is consolidating before its next move higher. Let it work for you. https://t.co/Q5zAMXlTmw — Michael Novogratz (@novogratz) July 20, 2019

His tweet was met with mixed reactions from the crypto community, which brought up the question of the value and use of BTC.

Valued Traditionally

It may come as a surprise to some that the value of BTC is determined or based on factors that are also used to determine “traditional” precious commodities such as gold and another mineral.

When carefully examined, the comparison between gold, other precious commodities and Bitcoin reveals that the only significant difference among these commodities is the fact that BTC is a virtual commodity. Apart from BTC’s physical in existence, nothing else truly stands out.

Most precious commodities are determined based on specific factors, some which include:

Scarcity

Utility

Supply

Demand

These four factors are primarily responsible for the value of any commodity.

In terms of scarcity, BTC is as rare to find as gold. Mining BTC is in itself a hard task requiring robust devices with exceptional computational power to successfully mine BTC. Similarly, mining gold requires robust structures that can hold up shafts within the deep mines, which are only getting deeper. Bitcoin’s mining difficulty set a new high this year, according to reports by CoinDesk.

When it comes to utility, both can be used as a store of value. Their prices fluctuate with BTC’s market being highly volatile; however, the principle is still maintained.

On supply and demand, because of their scarcity, demand outweighs supply thus influencing the valuation of these commodities. There is the planned BTC halving to limit its supply, and minable gold is already scarce.

Could Novagratz Be Right?

Michael Novogratz made a bold statement, but was he right? The possibility of BTC hitting a low of $100 seems close to impossible. Currently trading at over $10,000, the only way BTC could get to $100 is by losing 99% of its value, which is a scenario that seems likely in the case where BTC is failing as Michael Novogratz mentioned.

However, there are the “black swan” scenarios as explained by a user on Twitter while replying to Novogratz.

Never say never bromigo. Black swan scenarios include:

– banning from traditional legal & financial system / regulatory risk

– miner collusion attacks

– people stop believing / something better comes up After all, BTC is as useful at $100 as it is at any other price. — Bitcoin Jack (@CryptoJackBro) July 20, 2019

The user raised the ongoing issue of regulation in various countries targeting digital currencies, among other reasons why BTC may fail. Miner collusion attacks and targeted regulations are the only real threat to BTC in the reasons provided by this user. Targeted regulations are especially dangerous as governments are clear on their intention to kill the cryptocurrency industry.

If Tether goes to $0, what will BTC go to? https://t.co/fZEHizmNyC — Preston Byrne (@prestonjbyrne) July 20, 2019

The Tether angle provided by Preston Byrne requires great discussion, due the ongoing court case filed by the NYAG. Damage on the value of Tether could impact BTC’s price, but it may not be as bad as BTC losing 99%of its value.

Michael Novogratz is known for his BTC predictions, some of which have come to fruition. Earlier in May, based on the report given by CoinTelegraph, Novogratz predicted that BTC would consolidate at $7,000-$10,000 range. Lately, BTC trades within and slightly beyond this range. The Galaxy owner seems to be aware of the happenings in the cryptocurrency community, especially on BTC. He might be right; BTC may never see $100.