Increasing Outlook: Sentiment & FY 2020 Forecast Support a “Non-Speculative” Bitcoin Price of $16,500

Please see important disclosures at the bottom of this report

Portfolio Strategy

The conditions appear in place for a continued rally in crypto asset prices over the course of the year. Last week brought two events that 1) incrementally de-risked the downside and 2) improved the bull market case.

1. We are gaining confidence in the sustainability of this rally with each day that passes after the halvening that we don’t see signs of trouble in the mining sector.
2. Investor sentiment data has shown signs of strength that offer encouragement for the prospects of a continued rally.  

There are risks that remain, but on balance we are seeing enough positive conditions unfold to give us room to revise our Bitcoin outlook upward to $16,500. 

Alongside our updated outlook, we are releasing our initial FY 2020 Bitcoin financial forecasts and fundamental valuation metrics to investors – this is the first of such sell-side forecasts on the market, as far as we know.

Our FY 2020 fundamental forecasts are calling for Bitcoin’s book value per share (cumulative mining revenue per coin) to reach $1,100, which is a $100 increase from our prior expectations. Investors will recall, the Market Cap/Cumulative Miner Revenue (Mkt Cap/CMR) valuation model I developed has been a very reliable predictor of market movements. Our target is applying a 15x Price/Book multiple (Mkt Cap/CMR), which is equal to its 3-year historical average. Based on our analysis, we believe Bitcoin continues to offer a strong fundamental investment opportunity, beyond a “great speculation”.