A new report released by Wedbush Securities on 14th February has found that bitcoin’s most recent price decline in the wake of ongoing operational issues at major bitcoin exchanges is actually a sign that the ecosystem is stabilizing.
Entitled ‘Bitcoin: Watch the Innovation, Not the Price’, the 16-page report suggests that six months ago, the consequences of such instability would have been far worse for the industry.
“As a sign of price stabilization we would point out that Bitcoin has declined less than 15% in the face of its biggest and oldest exchange being crippled and other key exchanges coming under a broad denial of service attack.”
The resulting stability, the report reasoned, should do much to continue to inspire more merchants, entrepreneurs and bitcoin users to get involved in the burgeoning industry.
The news comes just days after Wedbush announced it would begin accepting bitcoin for its reports. ‘Bitcoin: Watch the Innovation, Not the Price’ is available in full via Wedbush’s website for 0.1 BTC.
Wedbush suggested heightened interest from investors will further improve not just bitcoin, but the entire digital currency ecosystem. As such, the report cautioned its readers not to be too skeptical of even some of the more “whimsical” market opportunities like dogecoin and RonPaulCoin.
The company stated:
“Keep in mind, Snapchat looked whimsical all the way to a $3 billion valuation.”
Wedbush also included materials meant to compare bitcoin’s volatility to that of other notable startups, including high-growth equities such as Facebook, Twitter and Tesla Motors.
The report provided evidence of what Wedbush called the “incredible growth” being observed in the ecosystem. Researchers suggested that they see this increase in bitcoin’s user base as a sign the industry is moving “toward the widespread adoption”.
Likewise, it noted Coinbase has already added more than 200,000 users to date this year.
In particular, Wedbush estimated Overstock’s decision to accept bitcoin could increase its GAAP net income by as much as 2%, as it was able to profit from initial bitcoin spending without the risk, though it has said it may now keep some bitcoin reserves.
“We believe these early use cases will lead to other large merchants getting comfortable accepting bitcoin,” the report concluded.
Stock Decline Image via Shutterstock