Bitcoin's terminal value is really $700,000: crypto investor

One early bitcoin (BTC-USD) investor has crunched the numbers on the crypto, and thinks it's looking mighty undervalued at the moment.

"We did a study showing the number of people using bitcoin over the years and price of bitcoin. Both of those data series went up by an order of magnitude every two years. If that kept going, that would put bitcoin at $700,000 when everybody with a smartphone uses it. Ten years time is a reasonable forecast," Pantera Capital founder Dan Morehead said on Yahoo Finance Live.

Morehead launched his first crypto fund back in 2013. Today, the firm has $2.8 billion in assets under management that spans venture investments and early stage token investments.

Suffice it to say, bitcoin remains quite removed from Morehead's terminal value forecast in present day.

Bitcoin has fallen from record highs it hit in April. Image: Getty
Bitcoin has fallen from record highs it hit in April. Image: Getty

From the record highs of more than $63,000 in mid-April, bitcoin has shed about 38% (including a trip below the $30,000 level in July, though it has rebounded today to $39,000). Major sell-offs have spread to other top cryptos such as dogecoin and ethereum amid fears of regulator crackdowns in the U.S. and China.

The selling pressure in crypto has also extended to stocks of companies with exposure to the space.

Coinbase (COIN) shares are down about 20% over the past three months. At $235.38, Coinbase shares trade well below the $328.88 level set on its Nasdaq debut in mid-April. PayPal (PYPL) and Square (SQ) (two early adopters of crypto for their platforms) shares have risen a mere 3% and 0.1% in the past three months, lagging the 5% gain for the Nasdaq Composite.

Morehead is staying bullish on crypto despite the latest sell-off, echoing recent upbeat sentiment Yahoo Finance heard from the CEO of crypto exchange Apifiny (which is eyeing an IPO later this year).

"We are launching a new fund that invests across the whole spectrum of assets and we're happy that the markets have pulled back a bit here. I think the macro story is so positive, there is so much money being printed and so many institutions are coming into the space that over the next twelve months the markets are going to resume their rally," Morehead explained.

Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.

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