SocGen currency analyst Sebastien Galy has just received his first request for analysis on Bitcoin, the red-hot digital currency that's become the obsession of the media and parts of the internet.

In an email to Business Insider, Galy says he's been besieged with questions from journalists in recent weeks, but that his first actual client inquired about an hour ago.

So anyway, Galy felt obliged to email some comments about valuing Bitcoins, and where they could be going.

Here are some of his comments:

Bitcoins have a money supply that is theoretically increasing following an algorithm approximating the effort of mining. With far more rapid advances in the technology of processing than mining, the rules have already been changed to stop some form of mining. This is effectively a form of revaluation of the currency.



“Monetary Approach” - One way to value bitcoins would be to compare the money supply of the US vs bitcoins. That simplistic approach would make bitcoins very valuable if they end up being able to buy the same USD asset. This is a supply approach and easily insolvable.



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Techinicals - From a trading point of view, we broke out of the upward trending channel in an exponential upswing typical of aggressive bubbles. As all bubbles there is a good story behind it, the trick would be to measure both the supply side and more importantly demand side value of bitcoins.