Wednesday, December 20th, 2017 10:36 am

Bitcoin II

Question A: A bitcoin has a fundamental value of at least $1,000.

Responses
 

Source: IGM Economic Experts Panel
www.igmchicago.org/igm-economic-experts-panel

Responses weighted by each expert's confidence

Source: IGM Economic Experts Panel
www.igmchicago.org/igm-economic-experts-panel

Question B: The best forecast for the value of one bitcoin in 2 years is its current price.

Responses
 

Source: IGM Economic Experts Panel
www.igmchicago.org/igm-economic-experts-panel

Responses weighted by each expert's confidence

Source: IGM Economic Experts Panel
www.igmchicago.org/igm-economic-experts-panel

Question A Participant Responses

Participant University Vote Confidence Comment Bio/Vote History
Acemoglu Daron Acemoglu MIT Uncertain 1
Bio/Vote History
         
Alesina Alberto Alesina Harvard No Opinion
Bio/Vote History
         
Altonji Joseph Altonji Yale No Opinion
Bio/Vote History
         
Auerbach Alan Auerbach Berkeley Strongly Disagree 10
Bio/Vote History
         
Autor David Autor MIT No Opinion
Bio/Vote History
         
Baicker Katherine Baicker Chicago No Opinion
Bio/Vote History
         
Banerjee Abhijit Banerjee MIT No Opinion
Bio/Vote History
         
Bertrand Marianne Bertrand Chicago Uncertain 2
Bio/Vote History
         
Brunnermeier Markus Brunnermeier Princeton Uncertain 9
Money is by definition a bubble since it derives its value from resale option. Bitcoin serves more a speculative role than one 3 classic ro
Bio/Vote History
         
Chetty Raj Chetty Stanford Did Not Answer
Bio/Vote History
         
Chevalier Judith Chevalier Yale Uncertain 4
Bio/Vote History
         
Cutler David Cutler Harvard Uncertain 6
Bio/Vote History
         
Deaton Angus Deaton Princeton Disagree 4
Bio/Vote History
         
Duffie Darrell Duffie Stanford Uncertain 5
For many reasons, the market price does not reflect fundamental Bitcoin value, which in any case is mainly related to avoiding detection.
Bio/Vote History
         
Edlin Aaron Edlin Berkeley Disagree 6
Bio/Vote History
         
Eichengreen Barry Eichengreen Berkeley Uncertain 5
Bio/Vote History
         
Einav Liran Einav Stanford No Opinion
Bio/Vote History
         
Fair Ray Fair Yale Strongly Disagree 5
Bio/Vote History
         
Finkelstein Amy Finkelstein MIT Disagree 2
Bio/Vote History
         
Goldberg Pinelopi Goldberg Yale Did Not Answer
Bio/Vote History
         
Goolsbee Austan Goolsbee Chicago Disagree 4
‘Fundamental’?
Bio/Vote History
         
Greenstone Michael Greenstone Chicago Uncertain 2
Bio/Vote History
         
Hall Robert Hall Stanford Uncertain 3
Conceptually, the fundamental value is the present value of its transaction services. Depends on competition in the private currency mkt
Bio/Vote History
         
Hart Oliver Hart Harvard Uncertain 5
I don't understand bitcoin. Economic theory tells us that it should be worthless but it is not. I still think it's a bubble that will burst.
Bio/Vote History
         
Holmström Bengt Holmström MIT Strongly Disagree 7
Bio/Vote History
         
Hoxby Caroline Hoxby Stanford Uncertain 1
Bio/Vote History
         
Hoynes Hilary Hoynes Berkeley Uncertain 5
Bio/Vote History
         
Judd Kenneth Judd Stanford Disagree 6
I don't see any "fundamental" value. It is like paper money where the value is determined by some social consensus.
Bio/Vote History
         
Kaplan Steven Kaplan Chicago Strongly Agree 9
Bio/Vote History
         
Kashyap Anil Kashyap Chicago Disagree 3
many ways to compute fundamental value (eg total black market spend/ # of bit coin), but an AML crackdown could also crush the value
Bio/Vote History
         
Klenow Pete Klenow Stanford Uncertain 1
Bio/Vote History
         
Levin Jonathan Levin Stanford Disagree 1
Bio/Vote History
         
Maskin Eric Maskin Harvard Strongly Disagree 7
Bitcoin has a fundamental value of $0
Bio/Vote History
         
Nordhaus William Nordhaus Yale Agree 3
Bitcoin may be the focal “reserve currency” for illegal transactions and money laundering. Perhaps price will end up much higher.
Bio/Vote History
         
Saez Emmanuel Saez Berkeley Disagree 5
Bio/Vote History
         
Samuelson Larry Samuelson Yale Uncertain 1
Unlike assets such as stocks that are backed by substantive economic activity, I see no way to define a "fundamental value" for bitcoin.
Bio/Vote History
         
Scheinkman José Scheinkman Princeton Strongly Disagree 9
The fundamental value of bitcoin is zero. Prices wholly dependent on forecasts of what others would be willing to pay in the future.
Bio/Vote History
         
Schmalensee Richard Schmalensee MIT Uncertain 6
Bio/Vote History
         
Shapiro Carl Shapiro Berkeley Did Not Answer
Bio/Vote History
         
Shimer Robert Shimer Chicago Strongly Disagree 8
Bitcoin has no fundamental value. It's value comes from the belief that it has value.
Bio/Vote History
         
Stock James Stock Harvard Uncertain 3
I know of no reliable way to calculate its fundamental value
Bio/Vote History
         
Thaler Richard Thaler Chicago Uncertain 1
Bio/Vote History
         
Udry Christopher Udry Yale Uncertain 8
This market is too new and too thin to know how to judge.
Bio/Vote History
         

Question B Participant Responses

Participant University Vote Confidence Comment Bio/Vote History
Acemoglu Daron Acemoglu MIT Uncertain 1
Bio/Vote History
         
Alesina Alberto Alesina Harvard No Opinion
Bio/Vote History
         
Altonji Joseph Altonji Yale No Opinion
Bio/Vote History
         
Auerbach Alan Auerbach Berkeley Agree 5
Bio/Vote History
         
Autor David Autor MIT Agree 7
But there is infinite variance around this forecast
Bio/Vote History
         
Baicker Katherine Baicker Chicago Uncertain 1
Bio/Vote History
         
Banerjee Abhijit Banerjee MIT No Opinion
Bio/Vote History
         
Bertrand Marianne Bertrand Chicago Agree 2
Bio/Vote History
         
Brunnermeier Markus Brunnermeier Princeton Strongly Disagree 8
Extrapolative expectations and speculation play an important role in determining the price. Also, it is not easy to short underlying bitcoin
Bio/Vote History
         
Chetty Raj Chetty Stanford Did Not Answer
Bio/Vote History
         
Chevalier Judith Chevalier Yale Uncertain 1
Bio/Vote History
         
Cutler David Cutler Harvard Uncertain 7
Bio/Vote History
         
Deaton Angus Deaton Princeton Agree 7
Bio/Vote History
         
Duffie Darrell Duffie Stanford Disagree 5
This market is so speculative and inefficient that the current price is only weakly related to the expected price in 2 years.
Bio/Vote History
         
Edlin Aaron Edlin Berkeley Disagree 6
Bio/Vote History
         
Eichengreen Barry Eichengreen Berkeley Uncertain 5
Bio/Vote History
         
Einav Liran Einav Stanford No Opinion
Bio/Vote History
         
Fair Ray Fair Yale Disagree 5
Bio/Vote History
         
Finkelstein Amy Finkelstein MIT Agree 2
Bio/Vote History
         
Goldberg Pinelopi Goldberg Yale Did Not Answer
Bio/Vote History
         
Goolsbee Austan Goolsbee Chicago Uncertain 3
Or zero
Bio/Vote History
         
Greenstone Michael Greenstone Chicago Uncertain 1
jlots of speculation about fundamental use value built into the price currently, which makes predictions very difficult
Bio/Vote History
         
Hall Robert Hall Stanford Disagree 9
The price of a security is not a random walk--it is derived from its dividend (transaction services) and the asset-pricing kernel.
Bio/Vote History
         
Hart Oliver Hart Harvard Uncertain 5
I don't understand bitcoin. Economic theory tells us that it should be worthless but it is not. I still think it's a bubble that will burst.
Bio/Vote History
         
Holmström Bengt Holmström MIT Uncertain 5
Bio/Vote History
         
Hoxby Caroline Hoxby Stanford Uncertain 1
Bio/Vote History
         
Hoynes Hilary Hoynes Berkeley Uncertain 5
Bio/Vote History
         
Judd Kenneth Judd Stanford Agree 6
Significant deviations from that prediction would imply that current holders are ignoring arbitrage opportunities.
Bio/Vote History
         
Kaplan Steven Kaplan Chicago Strongly Disagree 1
Bitcoin will be valuable, but will be worth less than $17,000 in two years.
Bio/Vote History
         
Kashyap Anil Kashyap Chicago Uncertain 1
no clear intrinsic value and lots of risk that regulators move to limit its value, but that does not guarantee a crash
Bio/Vote History
         
Klenow Pete Klenow Stanford Disagree 5
Bio/Vote History
         
Levin Jonathan Levin Stanford Uncertain 1
Bio/Vote History
         
Maskin Eric Maskin Harvard Disagree 6
I wouldn't be surprised if Bitcoin collapsed within 2 years
Bio/Vote History
         
Nordhaus William Nordhaus Yale Agree 5
How could it be other?
Bio/Vote History
         
Saez Emmanuel Saez Berkeley Uncertain 4
Bio/Vote History
         
Samuelson Larry Samuelson Yale Agree 5
But the current value is such a noisy forecast as to be of virtually no use.
Bio/Vote History
         
Scheinkman José Scheinkman Princeton Uncertain 8
Shorting is more costly than going long - prices reflect more the optimists' views. BTC prices could suffer from incr. supply of other CCs.
Bio/Vote History
         
Schmalensee Richard Schmalensee MIT Agree 2
This is the textbook answer, but I'm not confident that it is correct here.
Bio/Vote History
         
Shapiro Carl Shapiro Berkeley Did Not Answer
Bio/Vote History
         
Shimer Robert Shimer Chicago Agree 3
Bio/Vote History
         
Stock James Stock Harvard Uncertain 1
My understanding is that shorting bitcoin is difficult so standard eff mkt theory might not apply
-see background information here
Bio/Vote History
         
Thaler Richard Thaler Chicago Uncertain 1
The price seems stupidly high but could go up!
Bio/Vote History
         
Udry Christopher Udry Yale Agree 5
If only I understood the psychology of people's expectations about each other's future beliefs about bitcoin... Sadly, I don't. Does anyone?
Bio/Vote History
         

10 New Economic Experts join the IGM Panel


For the past two years, our expert panelists have been informing the public about the extent to which economists agree or disagree on important public policy issues. This week, we are delighted to announce that we are expanding the IGM Economic Experts Panel to add ten new distinguished economists. Like our other experts, these new panelists have impeccable qualifications to speak on public policy matters, and their names will be familiar to other economists and the media.

To give the public a broad sense of their views on policy issues, each new expert has responded to a selection of 16 statements that our panel had previously addressed. We chose these 16 statements, which cover a wide range of important policy areas, because the original panelists' responses to them were analyzed in a paper comparing the views of our economic experts with those of the American public. You can find that paper, by Paola Sapienza and Luigi Zingales, here. The paper, along with other analyses of the experts' views, was discussed during the American Economic Association annual meetings, and the video can be found here.

The new panelists' responses to these statements can be seen on their individual voting history pages. Our ten new economic experts are:

Abhijit Banerjee (MIT)
Markus K. Brunnermeier (Princeton)
Liran Einav (Stanford)
Amy Finkelstein (MIT)
Oliver Hart (Harvard)
Hilary Hoynes (Berkeley)
Steven N. Kaplan (Chicago)
Larry Samuelson (Yale)
Carl Shapiro (Berkeley)
Robert Shimer (Chicago)


Please note that, for the 16 previous topics on which these new panelists have voted, we left the charts showing the distribution of responses unchanged. Those charts reflect the responses that our original panelists gave at the time, and we have not altered them to reflect the views of the new experts.

We have also taken this opportunity to ask our original panelists whether they would vote differently on any of the statements we have asked about in the past. Several experts chose to highlight statements to which they would currently respond differently. In such cases, you will see this "revote" below the panelist's original vote. We think you will enjoy seeing examples of statements on which some experts have reconsidered.

As with the 16 previous statements voted on by new panelists, these "revote" responses are not reflected in the chart that we display showing the distribution of views for that topic: all the charts for previous questions reflect the distribution of views that the experts expressed when the statement was originally posed.

About the IGM Economic Experts Panel

This panel explores the extent to which economists agree or disagree on major public policy issues. To assess such beliefs we assembled this panel of expert economists. Statistics teaches that a sample of (say) 40 opinions will be adequate to reflect a broader population if the sample is representative of that population.

To that end, our panel was chosen to include distinguished experts with a keen interest in public policy from the major areas of economics, to be geographically diverse, and to include Democrats, Republicans and Independents as well as older and younger scholars. The panel members are all senior faculty at the most elite research universities in the United States. The panel includes Nobel Laureates, John Bates Clark Medalists, fellows of the Econometric society, past Presidents of both the American Economics Association and American Finance Association, past Democratic and Republican members of the President's Council of Economics, and past and current editors of the leading journals in the profession. This selection process has the advantage of not only providing a set of panelists whose names will be familiar to other economists and the media, but also delivers a group with impeccable qualifications to speak on public policy matters.

Finally, it is important to explain one aspect of our voting process. In some instances a panelist may neither agree nor disagree with a statement, and there can be two very different reasons for this. One case occurs when an economist is an expert on a topic and yet sees the evidence on the exact claim at hand as ambiguous. In such cases our panelists vote "uncertain". A second case relates to statements on topics so far removed from the economist's expertise that he or she feels unqualified to vote. In this case, our panelists vote "no opinion".

The Economic Experts Panel questions are emailed individually to the members of the panel, and each responds electronically at his or her convenience. Panelists may consult whatever resources they like before answering.

Members of the public are free to suggest questions (see link below), and the panelists suggest many themselves. Members of the IGM faculty are responsible for deciding the final version of each week’s question. We usually send a draft of the question to the panel in advance, and invite them to point out problems with the wording if they see any. In response, we typically receive a handful of suggested clarifications from individual experts. This process helps us to spot inconsistencies, and to reduce vagueness or problems of interpretation.

The panel data are copyrighted by the Initiative on Global Markets and are being analyzed for an article to appear in a leading peer-reviewed journal.

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