Investment bank and asset management firm Needham Company has released a report that concludes that bitcoin is currently undervalued by 58% based on today’s price.
The report values bitcoin at $655, compared to about $412 today and advises that investors buy shares in the Bitcoin Investment Trust (GBTC), a vehicle for speculators to invest in bitcoin without actually buying and holding the asset.
Spencer Bogart, author of the report and Needham’s newly appointed equity research associate in charge of bitcoin and blockchain, said that the report is a vote of confidence in an emerging technology many have questioned as a stable store of value.
Bogart told CoinDesk:
“We believe bitcoin has value as both a digital gold and as a payments channel.”
Currently, there is $74bn worth of gold held in exchange-traded funds (ETFs) around the world, according to the numbers used in the report. Of bitcoin’s market cap of $6.3bn, Bogart estimates roughly 75%, or $4.8bn consists of money being treated as an investment.
That’s 6% of the value of gold ETFs, the report said, a number which the investment bank predicts could increase 25% by 2020.
Bogart used the percentage of bitcoins currently being held as an investment