Since Bitcoin (BTC) burst onto the digital scene in 2009, the innovation, first headed by Satoshi Nakamoto, has been lauded as an optimized, decentralized version of Visa, Mastercard, and the like. And while the narrative has undoubtedly changed over the years, with the “BTC is digital gold” argument becoming a common sight, many believe that the world’s first blockchain network could still usurp centralized networks with ample research, development, and most importantly, time.
In a recent edition of Off The Chain, a crypto-centric newsletter and podcast run by Anthony Pompliano, the founder of Morgan Creek Digital Assets and an overt skeptic of banks, it was explaining that Bitcoin could begin to make a move on centralized payment ecosystems. Pompliano, who authored the piece, explained that a spotlight should be put on the blockchain itself, dubbed the “world’s most secure transaction settlement layer,” rather than just BTC itself.
And while Pomp made it clear that it is difficult, maybe impossible to value payment ecosystems, as the concept of network value is often abstract, not quantifiable, and still developing, the leading crypto investor did his best to draw attention to Bitcoin’s strong, but lesser-known fundamental measures.
Bitcoin, the transaction settlement network, is a sleeping giant —more people should be talking about this. https://t.co/aUwlVWegMn
— Pomp (@APompliano) January 15, 2019
Morgan Creek’s founder also quipped that he wouldn’t be surprised for BTC to start making a move on Visa and Mastercard. This move may only be accentuated as scaling solutions like the Lightning Network and other improvements go live and garner copious traction, while Bitcoin’s fundamentals continue to beat that of its altcoin counterparts.
Bitcoin’s Market Cap May Surpass Visa & Mastercard… Eventually
Citing recently-aggregated data from Diar, a leading crypto-friendly publication and research unit, Pomp noted that Bitcoin’s miners were “paid a total of $5.8 billion in revenue (fiat value of BTC produced) in 2018.” Although these aren’t exact numbers, especially considering the depreciation of BTC and other pertinent nuances or caveats, Pomp explained that this sum, the “top line revenue figure,” would help put Bitcoin’s status in the payment world “into context.”
The commentator, known for anti-bank, pro-crypto rhetoric and scalding comments on the establishment, subsequently compiled and visualized basic financial data from Visa, Mastercard, Square, Western Union, and two leading social media platforms to convey a point.
Pomp explained that from a revenue multiple (revenue to market capitalization ratio) point of view, Bitcoin is effectively more undervalued that both Visa and Mastercard — “the two transaction settlement networks that are most commonly compared to Bitcoin.” He noted that although BTC isn’t meant to be valued by revenue multiple, a measure often used in traditional markets, this gives context to the underlying blockchain’s performance and pseudo-inherent value.
And while BItcoin’s RM is expected to increase over 2019, due to suppressed prices, Pomp made it clear that such a move would be reasonable, “given the fast growth rate and historical premiums given to early companies/networks in an attempt to price in untapped potential.”
With all this in mind, he expressed that he wouldn’t be surprised if Bitcoin, currently 1/4th the market cap of Mastercard and 1/6th of Visa, begins to overtake the valuations given to traditional payment networks over the next three years. Ending his analysis piece on an optimistic note, Pomp wrote:
The legacy networks were built for a world that we no longer live in and the decentralized network is built for the future.
This recent quip comes just days after Pomp took to Ran NeuNer’s Crypto Trader to claim that he expects for BTC to range trade between $2,500 and $4,500 for much of 2019. However, like his Off The Chain post, he remained bullish on the network’s fundamentals, explaining that hashrate quadrupled (at 2018’s peak), while transaction count increased month-over-month from March until now. And, a collective $400 billion worth of value was settled on the Bitcoin network throughout 2018.
Title Image Courtesy of Andre Francois Mckenzie Via Unsplash