The recently released Needham report forecasts the bitcoin price to reach $848 in the near future and summarizes that;
Ultimately, and contrary to a popular narrative, we see Bitcoin's fundamentals trending very favorably. We find the outlook very encouraging, and we believe the
short- to intermediate-term horizon is among the most exciting Bitcoin has seen.
The entire report is worthwhile reading for anyone looking to invest in the leading cryptocurrency.
Here are the highlights:
Faster-than-expected adoption: Adoption of Bitcoin as both a digital gold and as
a payments network has grown faster than we forecasted in March and, as a result,
we are raising our price projection and forecasts. At the end of August, transaction volume was roughly 30% higher than we projected, and as a result we are raising our 2020 market share estimates by a more conservative 10%. Adoption of Bitcoin as a digital gold has similarly outpaced our expectations.
Attractive & improving fundamentals: Historically, Bitcoin's volatility, liquidity, and correlation have been primary concerns, but we find that all these factors have trended very favorably. □ Volatility: Bitcoin's price volatility has declined significantly over recent years and now roughly resembles that of the average small-cap security.
Correlation: Likely among the most appealing aspects of Bitcoin for institutional investors and portfolio managers is the absence of significant correlation to other major assets. We found a lack of significant correlation to every major asset class and sub-group we measured, including commodities, fixed income, and various equity sectors (among others).
Liquidity: Even our significantly constrained liquidity analysis found that Bitcoin's daily trading volume roughly resembles that of a mid-cap security. However, this liquidity is dispersed across exchanges and more difficult to access.
Protocol improvements induce compelling optionality: Looking ahead, there are several forthcoming improvements to the Bitcoin protocol that we believe could significantly 1) benefit scaling, 2) accelerate the pace of development and innovation,
and 3) augment Bitcoin’s functionality and use cases. Taken together, we believe
these developments could serve to significantly increase the utility of (and demand
for) Bitcoin. Therefore, we think the outlook is very bright.
Learn more about Needham & Company.