Bitcoin Valuation Adjustment
In a recent report, investment firm Needham and Company revised the estimated present value of Bitcoin from $655 to $848. The estimate accounts for a projected increase in market share in the retail payments market, upward trending adoption rates, reduced volatility, and technological developments surrounding Bitcoin. The firm believes that the global market for retail payments will reach $67.5 trillion by 2020 and that Bitcoin will likely capture .28% ($182 billion) of payments. Using confirmed Bitcoin transactions as a correlative tool to estimate total transactions, information from blockchain.info reveals that daily confirmed transactions have approximately doubled over the past two years to 200,000 per day.
Graph from Blockchain.info
Reduced volatility also contributes to Needham and Co.’s analysis of Bitcoin. Volatility is now more comparable to traditional assets, even smaller than certain energy and technology stocks. Lastly, the investment firm believes that the expansion in technologies surrounding Bitcoin that will come to market over the course of the next year will increase demand for Bitcoin, driving the value upwards. The rapid growth in valuation reflects the magnitude of these shifts.
The report was issued by New York based firm Needham and Company. The firm has offered investment banking services and asset management for 31 years. Since its founding, the firm has led or co-managed over 785 public offerings and completed over 385 mergers and acquisitions.
Report author Spencer Bogart is a chartered financial analyst, with two years’ experience as an equity researcher at Needham and Company. In a previous report, Bogart estimated the value of Bitcoin to be $655, over $200 higher than the $412 present day value of Bitcoin when the report was issued. Following his previous estimation, the value of Bitcoin exceeded his estimations, reaching $675 within three months of his projection. If his current estimates are accurate, Bitcoin investors can expect serious value growth in coming months.