How to evaluate Bitcoin?

-- Bitcoin has value
-- Its value goes up as its market cap gets larger
-- Its price is volatile with its value and less with its supply

As it is for currency or gold, bitcoin's only value is as a media for trade. The value of such a media depends on how many people use it, how they trust that people will continue to use it, and how easy to use it.

Currency is the most valuable media. Gold is currently more valuable than bitcoin. However, Bitcoin should also have gone across the threshold as a valuable media.

Currency and gold have maximized their user pool and their prices change slightly with supply and demand. Bitcoin, on the other side, is in its rising period.

A simple formula to calculate bitcoin's price will involve with the hash rate and the expected size of its pool. For example, we can take gold's current market cap as bitcoin's cap. Optimistically, you may want to replace gold with bitcoin in your portfolio considering bitcoin's potential as a method for direct payment.

The risk is that, unlike currency, bitcoin is not something that this world must have. While it does not have to have gold either, it is less possible for all gold holders to dump it at the same time. Bitcoin is very risky when its pool is still as small as it is now.