BNY Mellon, the nation’s oldest banking institution, founded in 1784, released a March 2021 report today covering various valuations frameworks for bitcoin. This came on the heels of the bank’s early February announcement that it plans to create a digital assets unit. The report, titled “Blending Art & Science: Bitcoin Valuations” compared the attributes of bitcoin to other currencies and monetary assets, offering new insight into how one of the country’s oldest legacy financial institutions views the cutting-edge of money.
“According to the S2FX model, Bitcoin is currently in cluster 4 (red dot cluster in chart below). The implication from this model is that as Bitcoin gains more mainstream momentum and is viewed more like gold, the scarcity value (as measured by S2F) and subsequent halving will ultimately drive prices to the gold dot cluster and implied total market value.However, while each cluster/phase evolution drives pricing progressively higher, the price range within a cluster is quite wide. For example, the May 2020 halving implied Bitcoin pricing in the $50,000 range versus the current $10,000 range.”
While the report did not give any definitive price targets or expectations for the future trajectory of bitcoin, it was yet another positive endorsement coming from Wall Street, from the nation’s longest-standing banking entity.