A new report published by investment bank, Needham & Company, suggests that Bitcoin is undervalued by potentially as much as 58%, or $200, at the moment.
Bitcoin is currently valued at around $412, but this is obviously subject to change at any time, but the report suggests that Bitcoin should in reality be valued at around $655, an increase of around 58%.
The investment bank estimates that around 75%, or $4.8 billion, of Bitcoin’s market cap of $6.3 billion is being treated as an investment, and makes the suggestion that investors wishing to see large profits should buy shares in the Bitcoin Investment Trust, a means by which investors can invest in Bitcoin whilst not actually purchasing any of the cryptocurrency.
Blockchain to blame
The report’s author, Spencer Bogart, an Equity Research Associate at Needham & Company, says the technology underpinning Bitcoin, the Blockchain, is at least partly to blame for Bitcoin’s undervaluation. He also added that the rapid increase in the number of non-cryptocurrency-based blockchains was also a factor.
However, he remains undeterred in his belief that Bitcoin will be a central player in the future of the technology, and that it is innovative in that it has a value as both a digital gold as a means of payment, saying, “we think there’s a strong possibility that Bitcoin will be the nucleus of security for all these blockchains.”