Morgan Stanley analyst James Faucette and his team sent a research note to clients a few days ago suggesting that the real value of bitcoin might be … $0.
That’s zero dollars. (Bitcoin stood at around $14,400 at the time of writing.)
The paper (titled “Bitcoin decrypted”) did not give a price target for bitcoin.
But in a section titled “Attempts to Value Bitcoin,” Faucette described why it is so hard to ascribe value to the cryptocurrency. It’s not like a currency, it’s not like gold, and it has had difficulty scaling. He concluded:
• Very difficult question to answer, but some points to consider
• Can Bitcoin be valued like a currency? No. There is no interest rate associated with Bitcoin.
• Like digital gold? Maybe. Does not have any intrinsic use like gold has in electronics or jewelry. But investors appear to be ascribing some value to it.
• Is it a payment network? Yes but it is tough to scale and does not charge a transaction fee.
• Bitcoin average daily trading volume of $3bn (last 30 days) vs $5.4 trillion in the FX market.
• Est. <$300mn in daily purchase volume vs. $17bn for Visa.
Faucette backed his argument with this chart of online retailers who accept bitcoin, titled “Virtually no acceptance, and shrinking”: