On Thursday, former Needham analyst Spencer Bogart, famed for predicting the sub-25 percent chance of the U.S Securities and Exchange Commission (SEC) approving a Bitcoin ETF, published a blog post estimating that bitcoin’s market cap could reach “well-beyond $100 billion”.
Bogart has recently left his position as Vice President of Equity Research at Needham where he published many investment reports focusing on Bitcoin, including coverage of Barry Silbert’s Bitcoin Investment Trust. He has joined Blockchain Capital as managing director and head of research.
Launched in the fall of 2013, Blockchain Capital is a startup by Brock Pierce and co-founders Bart Stephens and Brad Stephens. The venture capital firm has invested in 42 companies including Abra, Alphapoint, Bitaccess, Bitfury, Bitgo, Bitpesa, BTCC, Chain, Civic, Coinbase, Gem, itbit, Kraken, Ledgerx, Stampery, Terion, Wave, and Xapo.
Tremendous Growth by All Stats
Bogart describes Bitcoin as “a quintessential disruptive technology that is moving from smaller and harder to serve markets toward more mainstream, high-value markets”, adding that:
Time and time again, Bitcoin has proven itself useful within market segments that are otherwise difficult or impossible to serve.
In addition, he observes that “Over the past few years, bitcoin has also grown tremendously by nearly all measurable stats”. He named two of his favorite indicators.
The first is the ‘estimated USD transaction volume’ which he said is “a reasonable proxy for economic activity of the Bitcoin network”, and its daily economic activity has more than quadrupled (CAGR 160%+) over the past 18 months. “Simply stated, Bitcoin has gained significant economic momentum”, he wrote.
The second of his favorite indicators is the ‘Bitcoin network hash rate’, which measures the computing power that is securing the Bitcoin network. “As is readily observed, this metric has increased five-fold since the beginning of 2016 (300% CAGR)”, he revealed, citing that “this amount of computing power is thousands of times more powerful than the world’s top-500 supercomputers combined”. While not a direct comparison, it indicates that the amount of computing power helping to secure the Bitcoin network is immense, Bogart conveyed.
Potential Market Cap of $100B+
While bitcoin has a market capitalization of over $18 billion at press time, Bogart wrote that “Unless trends reverse drastically, bitcoin is on its way to becoming a $100B+ market over the next few years”. In addition, he noted that :
There are many tailwinds pushing Bitcoin toward an adoption tipping point that I think will drive bitcoin’s market cap well-beyond $100B.
These tailwinds consist of factors that can be grouped into ‘internal’ and ‘external’ factors of Bitcoin and its ecosystem.
Internal factors include Bitcoin’s endemic features like multisignature protection and time-locked transactions, apps that require bitcoin to use, and maturing market fundamentals such as liquidity and stability. The external factors he cited are national policies and financial crises. National policies can be for or against Bitcoin such as Switzerland’s pro-Bitcoin stance or China’s capital outflow restrictions.
What do you think of the $100B+ market cap estimate? Let us know in the comments section below.
Images courtesy of Shutterstock and Blockchain Capital
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