Bitcoin Price Projects To Pass $840 USD: Top Investment Analyst
Bitcoin, as an investment, is having another great year, buoyed by the major movement seen this past week. Seven days ago, Bitcoin was trading at less than $630 USD, and now it is approaching $690 USD. For 2016, it is up well over 50% and one noted investment analyst says this is just the beginning. Spencer Bogart of Needham & Company, headquartered on Park Avenue in New York, sees Bitcoin’s future as being very bright, and releases his findings in a detailed Bitcoin “Investment Thesis.”
To The Moon!
Bitcoin has many things going for it, but it is not often that the mainstream admits it. Originally revealed by mega-site ZeroHedge, you can see the full report in its entirety here.
Bitcoin is now entering its buying season, as trading has traditionally increased during the winter, and faded during the summer. The Bitcoin “halving” has reduced the supply of the disinflationary currency, forcing values up as demand increases. And Segregated Witness should help Bitcoin close the year strong, provided miners and full nodes choose to adopt it and allow the 60%+ increase in block efficiency/capacity it is designed to provide. Here are three observations Bogart made.
The “improving fundamentals” refers to expected protocol updates like Segregated Witness and The Lightning Network. Bogart also mentions Bitcoin’s increased stability making it more appealing."1) Adoption trending faster than we forecasted in March, 2) Improving fundamentals, and 3) Upcoming protocol improvements that present attractive optionality for the price of Bitcoin. At the highest level, we continue to see value in Bitcoin as a "digital gold" and as a payment network that is enabling a global, open, permissionless financial system.”
Bitcoin has also shown itself equal to Gold when a crisis in the market strikes. The report shows with this chart below that people move into Gold and Bitcoin after the unexpected “Brexit” revolt by Great Britain. Bitcoin has shown itself to be a great asset and safe haven for years. “Grexit,” the "bail-in’s" of Cyprus back in 2013, and the current economic downturn in China being clear examples of Bitcoin’s value under fire.“While Bitcoin is notoriously volatile—especially relative to the world’s major currencies—its volatility has declined significantly in recent years and is similar to several more well-known assets. Specifically, Bitcoin’s daily volatility is now comparable to small cap equities”
Bogart also shows how much Bitcoin has grown, going back over three years in transaction history to underscore the volume increases. If you just look from the first of the year, Bitcoin transaction volume has gone from 125k to 230-260k daily.
So Needham’s Bogart seems to love Bitcoin, but not the Investment Trust (GBTC) it rode in on. He can’t seem to make a recommendation on GBTC at this time.“Daily USD on-chain transaction volume, as estimated by Blockchain.info, has grown at an impressive 224% CAGR since January 2013. Spikes in USDequivalent transaction volume tend to occur when the price rises significantly. In particular, we note that transaction volume in mid-2016 has grown more than threefold over a year ago."
What is important is the underlying value of the “security,” Bitcoin, which is starting to hit its stride. With more positive reviews like this, and with prices jumping 10% a week, the mainstream investor is that much closer to finding out the other amazing things it can do besides exemplify a good high-risk, high-yield investment.“We view shares of the Bitcoin Investment Trust (OTCQX: GBTC) as benefiting from the rise of value in their underlying security, Bitcoin. Based on our projected demand for Bitcoin as a “digital gold” and as a payments channel, we estimate a present value of $848 per Bitcoin. However, given the substantial premium at which GBTC shares trade relative to their net asset value, we are downgrading GBTC shares to HOLD.”
