Mr. Bott, I'm confused as to your overall point in this article. Those of us who trade in gold and bitcoin are not irrational. We are not unaware of Metcalfe's law. There are plenty of sites that make it pretty easy to track that metric such as https://www.longhash.com/en/livecharts/market-valuation-level
Looking at the charts at the longhash site one can see that a coin like LTC which adds efficiency to the medium of exchange aspects of BTC, according to Metcalfe's law, is fair valued and that BTC is only slightly overvalued. This is because the ratio of market cap to network size in BTC is suppressed exactly because of how its scarcity acts as a store of value.
I own gold because it is a proven hedge against fiat currency and equity value volatility. I own Bitcoin because it stands a reasonable chance of playing a major role in an upcoming monetary reset. I agree with Raoul Pal, Michael Saylor, PayPal, Fidelity, and other smart financial players that the potential upside for bitcoin is just too large to not use bitcoin in lieu of fiat currency for a portion of one’s reserves.
Good technical analysis of the price cycles of bitcoin is not hard to follow and it is not difficult for the average person to avoid buying it when it is overvalued and buying it when it is undervalued or fairvalued. Like gold, though, small buyers will pay a premium over the prevailing average price for small purchases. Therefore, for a small buyer, today's price in not a bad entry point. It would be perfectly fine for someone who just wants to buy and hold some small part of their reserves in bitcoin to do it now. I predict that such a buyer who just holds it for a short number of years will be very pleasantly surprised.
We can come back to this comment in the future to see how things go, but I predict that BTC will rise from its current ~$11,300 to above its recent nominal high of $12,000 to $14,000 fairly quickly and by the end of 2021 stabilize to between $20,000 and $40,000. When it hits $100,000 it very may well drop to $40,000 before rising above $100,000 again and such cycles will lengthen from months to years in the future, but the longterm potential of BTC reaching very high valuations compared to the dollar is well worth the volatility on the way up. Besides, volatility is good — it allows little guys with some guts and the discipline to cost average sell into overvaluation and cost average buy into undervaluations to build larger positions. As more and more large players such as small nations and large corporations enter this space, such opportunities for the little guy will be a thing of the past as bitcoin becomes a boring and stable worldwide reserve asset like gold. Few really care what the “final” valuation will be compared to fiat as time goes by. Holding gold or bitcoin is a bet on the probability that the value of reserve assets such as gold and bitcoin will no longer be measured in terms of fiat but instead the other way around. So in the end does it really matter if one needs $4,000 or $40,000 to opt-out of the fiat system to reserve their value in gold? Similarly, in the end, does it really matter if one needs $100,000 or $1,000,000,000* to opt-out of the fiat system to reserve their value in Bitcoin? Short answer: NO.
*For those of you new to bitcoin you don’t have to own entire bitcoins; you can buy small fractions of bitcoin that work just as well as entire coins.