So far this year, BitTorrent (CCC:BTT-USD) crypto has been on a torrent, so to speak. It’s up almost 13 times from where it ended last year. Coindesk indicates that it ended 2020 at a price of 0.0289 cents. As of Saturday, June 5, BTT traded at 0.4025 cents per BTT. That is 12.9 times greater than the end of the year.
But it has also fallen significantly from its peak earlier in April. On April 5, it surged above 1 cent per at 1.0589 cents per BTT token. Decrypt.io wrote that “several new updates to BitTorrent’s File System, announced yesterday on Twitter, could be the reason.” In fact, at one point the token rose 60% in one 24 hour period, according to the site.
At today’s price, BitTorrent has a market capitalization of $2.6 billion and is ranked as the 46th largest cryptocurrency, according to Coinmarketcap.com. There seems to be every good reason to believe that the token could reach its former heights.
BitTorrent’s Move to Content Distribution
BitTorrent is a token that was launched on the Tron blockchain in early 2019 by the BitTorrent Foundation. Last month I wrote about how Justin Sun bought BitTorrent, Inc.’s assets and started to integrate them with the Tron (CCC:TRX-USD) network. Since then, BitTorrent has been trying to refocus its main purpose.
BitTorrent has been looking to pivot its core business model into one that offers decentralized storage, data protocols and content distribution. In the past, it was a software company with a “decentralized” (peer-to-peer) file-sharing protocol that was known for stealing movies and music.
Since then, the company has cleaned up its act. In fact, it has signed deals with a number of movie studios. Recently BitTorrent announced its plans to acquire blockchain-based esports streaming service DLive.tv. DLive is a sort of Twitch-type service that allows its users to watch other play games online.
BitTorrent plans to migrate all BitTorrent-related services to one unified ecosystem named BitTorrent X. “BitTorrent X is the next step in establishing a truly decentralized internet,” Justin Sun said.
That is a pretty ambitious goal. But it certainly sets BitTorrent apart from the crowd of other cryptocurrencies. If BitTorrent can pull this off, especially if it does other similar acquisitions, the crypto could really end up standing out. That, in turn, could push up the BTT token to its former heights.
But things have not always gone so well for Justin Sun. For example, Decrypt.io reported that DLive lost its most famous content creators, PewDiePie, last year. In addition, the report cited two other acquisitions that Sun has made that have lost popularity with some of its users.
Comparing BitTorrent Crypto With eGame Stocks
BitTorrent X’s new website has a headline citing the following three facts about its popularity: “BitTorrent, the world’s largest distributed network, powered by BTT. Over 200 million wallets, 2 Billion Users, 100 million MAU.”(MAU stands for monthly average users). These facts probably support a much higher market value than just $2.6 billion.
For example, Roblox (NYSE:RBLX), a popular do-it-yourself content gaming company, indicates that it has 42.1 million DAU (daily active users). It also has a $55.99 billion market value. We can use this to estimate BTT’s value.
For example, let’s assume that half of the daily users turn into monthly average users. So here is the formula: (42.1 m x 30)/2. That works out to 631.5 million MAU. Therefore, if we divide the market value of $55.99 billion by 631.5 million, we can estimate that for every 1 million MAU, the value is roughly $87 million.
Next, we multiply $87 million by BitTorrent’s 100 million MAU. That equals a value of $8.7 billion. This is 3.346 times the present $2.6 billion market value for BitTorrent’s market cap.
In other words, the BTT token is worth 3.346 times its price today of 0.4025 cents, or 1.347 cents. That represents a potential gain of 235% over today’s price. This is why I believe that BitTorrent could end up moving over its previous peak of 1.0589 cents.
Another example is Skillz (NYSE:SKLZ), a mobile gaming and tournament platform. It has 2.4 million MAU. But SKLZ stock has a giant market cap of $8.5 billion. This implies a value of $3.54 billion per million MAU. That implies that BitTorrent should have a market value of $354 billion.
What to Do With BitTorrent
This market cap is not likely to happen since it would make it larger than Ethereum (CCC:ETH-USD). One reason this also doesn’t work is that BitTorrent has not yet monetized the average revenue per user (ARPU) in its network like Skillz and Roblox have done.
Nevertheless, the point is made. If Justin Sun can get BitTorrent to become a huge cash flow machine like Roblox and Skillz, the market cap stands to skyrocket. As it stands now, its value, simply from this potential, is probably close to $4.35 billion, half of its comp value vs. Roblox. This makes it worth 67.3% more than its present market cap of $2.6 billion.
In other words, look for BitTorrent to move up 67.3% from today’s price of 0.4025 cents to 0.6733 cents per BTT token. That is a good ROI for most investors in digital assets.
On the date of publication, Mark R. Hake held a long position in BitTorrent (BTT) and Ethereum (ETH). The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Mark Hake writes about personal finance on mrhake.medium.com and runs the Total Yield Value Guide which you can review here.