Placing a floor on the value of bitcoins is… what, exactly?
This is an excellent question and one of the core questions that concerns many Bitcoin detractors. Bitcoin can be turned into neither jewelry nor battery, so what is it good for? Gold is useful, but is Bitcoin? Isn't that a "gotcha" for Bitcoin's utility and value?
Ah, but we're thinking in bricks and mortar when we pose the question like this when we should be thinking more digitally. What's the value of HTTP? Or MasterCard's processing network? Have you ever tried wearing HTTP as a bracelet or replacing your Tesla's battery with MasterCard's routing technology?
In financial accounting, an asset is an economic resource. Anything tangible or intangible that is capable of being owned or controlled to produce value and that is held to have positive economic value is considered an asset. Simply stated, assets represent value of ownership that can be converted into cash (although cash itself is also considered an asset)
That sounds like Bitcoin to me. It is an intangible asset that can be owned, can be controlled to produce positive economic benefit (for instance, in moving value nearly instantly across borders) and can be converted into cash. Bitcoin is an asset.
But what type of asset is Bitcoin and what does a Bitcoin "represent value of ownership" in? I believe the answer might be equity; a Bitcoin represents discreet ownership in the Bitcoin technology and network. The Latin root for equity is aequitas which combines the notions of equality, justice and fairness and, appropriately enough, was personified and depicted on coins.
This brings us back to our original question. What is the price floor of Bitcoin? Well, what is the price floor of equity? Zero. To the extent that Bitcoin as a technology provides value it has value--just like HTTP or MasterCard's network technology. If no one uses it, it can be worth $0. However, to the extent Bitcoin's technology provides value better than competing alternatives (such as cash, credit, Litecoin, Dogecoin, etc.) it will likely have a premium value. Bitcoin's equity value should thus be (theoretically) tied to its value purely as a technology asset unlike traditional stock equity in a corporation, as I don't think Bitcoin will be paying cash or stock dividends anytime soon. Just like a stock there is a fixed amount of Bitcoin outstanding with periodic new issuances. The analogy of Bitcoin as equity can be taken too far, but I think it at least helps us in answering the Bitcoin price floor question.
But what about a ceiling? What happens when the value of Bitcoin exceeds its asset value? Just write up the extra value as goodwill and stick it on your balance sheet.