In April Pantera sent a letter to investors, noting that one of their models, which compares the amount of new Bitcoin users to the price of the cryptocurrency. According to the model the terminal price is $700,000.
The logic of the model is that BTC’s price goes up by $200 for every 1 million new Bitcoin users. The company says the model has been spot on every single time except when the BTC price lagged in February 2016.
The model suggests that BTC would go up nearly 1,200% from its current value of $54,000, assuming that Bitcoin’s price continue to rise $200 every time a million users enter the market.
“3.5 billion people have a smartphone, the only requirement to use Bitcoin. In the long, long run – it’s not obvious why most of those won’t use bitcoin. That’s not many more than share photos on Facebook.
Using these relationships, we can postulate a possible terminal value for bitcoin. If the price continues to rise $200 per million users, Bitcoin would become fairly valued at $700,000.
At that level, Bitcoin would be worth $15 trillion – or 15% of global M2 (money supply). That seems totally doable.”
Pantera Capital isn’t just super bullish on Bitcoin. The company also follows closely the rest of the non-Bitcoin+Ethereum market share, which keeps eye on the growth of all cryptocurrencies other than BTC and ETH. Pantera suggests that the biggest opportunities and gains are more likely to be outside of Bitcoin and Ethereum (altcoins) as the rest of the industry is making value gains against the two biggest cryptocurrencies by market capital.
“Bitcoin is a solid proxy for the blockchain disruption. However, it’s not everything. Bitcoin is about half of the market cap of the industry – but possibly less than half of the future opportunity…
The non-Bitcoin+Ethereum market share has more than doubled, from 16% to 34%, in the past three months. Watch this space. That’s where the largest gains are likely to be.”
Source: Fintechs.fi – Fintech News