BlockNovum, a Swiss Blockchain and Cryptoasset investment research startup, has released its first public investment research report. It covers the most prominent cryptoasset to date — Bitcoin [BTC]. In the report BlockNovum issues a Buy rating for Bitcoin, as long as the market price stays below their current target price of $8,000. The price target represents the present value of BTC’s expected current and future utility values obtained through a fundamental valuation. BTC also shows substantial long-term price appreciation potential if use cases mature and gain more market share. Based on the valuation, a BTC price of above $10,000 is a realistic possibility in the next 12 months.
The report consists of an extensive fundamental valuation of Bitcoin, based on the expected utility values of its most promising use cases. BlockNovum’s financial model then calculates the present value of a Bitcoin token, by discounting these future utility value inherent to one BTC at a discount rate of 30%. Consequently, the identified present value then helps decide if Bitcoin is under- or overvalued at today’s price level.
In addition, alternative valuation approaches are illustrated, such as cost-based valuation or ratio-analysis, to achieve a holistic valuation perspective and to verify the $8,000 valuation result. Finally, BlockNovum analyzes Bitcoin according to a set of key qualitative assessment factors. The complete analysis is then synthesized into a recommendation and investment profile.
Summary of Bitcoin Investment Report:
BlockNovum expects the price of Bitcoin to have a current value of $8,000 per BTC. This price is justified by the present values of the underlying future utility values of modeled Bitcoin use cases. The store of value (“digital gold”) use case, along with the usage as a gateway to other cryptoassets, promises a substantial addressable market size for Bitcoin. The size of the market served by BTC, for these two use cases alone, is estimated to be over $2.8 trillion in 2028. Further markets where Bitcoin acts as a transfer facilitator (though at a smaller scale) are digital payments, remittances, and banking of the unbanked.
Bitcoin’s characteristics as a fully digital, safe, decentralized, scarce and autonomous currency free from any government control makes it a perfect fit as a digital store of value asset with appreciation potential. Furthermore, Bitcoin’s ability to reduce transaction costs and simultaneously increase speed through technological improvements (e.g. Lightning Network) makes its usage highly attractive in the other aforementioned industries.
It is also estimated that 66% of today’s present value of $8,000 is based on current utility value and 34% accounts for speculation on future utility value.
An alternative approach, cost-based valuation, predicts a price range of $7,440 and $8,670 per BTC, validating the fundamental valuation result. The ratio analysis — consisting of Network Value to Transactions Ratio (NVT), Price to Metcalfe Ratio (P/M), and Network Value to Metcalfe Ratio (NVM) indicates that BTC is currently largely supported by fundamentals. However, short-term corrections are a possibility if fundamentals don’t develop as expected or market sentiment stays bearish. For example, NVM shows signs of a temporary overvaluation of BTC, which might lead cautious investors to delay investing for a few months.
Nevertheless, the qualitative assessment confirms BTC’s strong positioning in six assessment categories, which supports its leading role as a “blue chip” token in the cryptoasset space. Recent developments such as the announcement of Bakkt, a jointly launched company by Starbucks, NYSE parent Intercontinental Exchange, and Microsoft to create an open and regulated, global ecosystem for digital assets, highlight Bitcoin’s perceived potential among leading corporations.
BlockNovum issues a Buy rating for Bitcoin, as long as the BTC price stays below the target price of $8,000. Hence, investors should aim to buy Bitcoin below the target price and account for their preferred margin of safety. Bitcoin serves several promising use cases, which gives it fundamental value. In particular, the store of value use case, where Bitcoin serves as digital gold, offers enormous market potential with an estimated market size of $2.6 trillion served by BTC in 2028. The qualitative assessment framework and ratio analysis confirmed Bitcoin’s strong and continuously growing fundamentals and further support the price target. However, another short-term price correction is a possibility if fundamental on-chain activity does not develop as expected.
The complete Bitcoin investment research report can be found here:
Bitcoin is one of many promising cryptoassets that BlockNovum is covering in the upcoming months. Future research will include similar valuations of other cryptoassets and shorter market screenings of promising early-stage startups.
BlockNovum is a Swiss Blockchain and Cryptoasset investment research & consulting firm. We provide professional assessments, fundamental valuations, and research reports for the emerging asset class of cryptoassets & blockchain startups. BlockNovum positions its cryptoasset research reports and services analog to established equity sell-side research providers. Therefore, our target clients include mainly institutional investors with an interest in allocating capital to cryptoassets, or that plan to invest directly in blockchain startups. Additionally, we also offer our reports and consulting services to accredited investors, such as angel investors.
This article does not constitute investment advice. Further disclosures and risks related to cryptoasset investing are listed in the report.
If you are interested in similar reports or customized consulting services, please contact us at firstname.lastname@example.org
Disclosure: I am/we are long BTC-USD.