Hello Steemers! I am in the venture capital industry and today I'll be discussing why 1 STEEM could be worth $300. You may think that's ridiculous, however just look at the rise of Facebook, Reddit, Bitcoin, and Ethereum. Steem synergizes cryptocurrency with social media. These are two of the fastest growing and most exciting fields.
Social media is extraordinarily broad. While steemit has potential and has proven to have all the right ingredients for disruption, it's not going to decimate Facebook or Twitter. But what it may disrupt is Reddit.
How big is reddit? Reddit is a privately owned company, so market cap and financial figures are not available. Externally, we can value reddit through two means: revenue multiple and comparison with similarly sized companies in the same vertical.
For a company like reddit, generally a valuation is at 5 to 15x revenue. Given that reddit has very strong growth (about 50% YoY) and strong commercialization aspects, a multiple of 11x seems appropriate. This would peg reddit at $15 billion.
If you compare reddit with similar internet properties, you would arrive at a valuation of $15 to $30 billion. Thus, I believe $20 billion is an appropriate conservative estimate.
Let's presume that Steemit becomes half as large as reddit, in three years. Assuming only a 20% annual growth rate of reddit*, they would be worth $35 billion by then. Half of that is $17.5 billion.
Steemit is more than just a social network however. It is also a cryptocurrency, with a stable Steem dollar. It's decentralized and backed by the blockchain. If you look at the tip bots (bitcointipbot, changetip) on reddit, you can quickly see the synergy. Bitcoin is currently worth $10 billion, and while I don't think it's plausible that steemit will overtake bitcoin, I think it's quite possible that:
That would place steem's value from crypto at $9 billion. Summing that up with the $17.5 billion from social media, that's a possible valuation of $26.5 billion.
Of course, there is monetary inflation of STEEM, so it's appropriate to discount that figure a bit. Unless steem makes it up with even further growth ;)
If you talk to any investor, you will see that venture capitalism is about optimism. There are a thousand reasons why an idea won't work. It's the ones that fight despite the headwinds that prevail. Uber is worth $60 billion, even though they have hundreds of lawsuits and fights with regulators worldwide.
So many people, like professor Bitcorn, said that bitcoin won't work. And look at the booming cryptocurrency industry today: it does work. There is no reward without risk, and while there's absolutely no guarantee that steemit will be worth anything in the next few years... there is huge upside if it does.
If you look at Facebook's stock performance, you'll see that they've more than tripled their value since IPO. However, this ignores the fact that angel investors and venture capitalists in Facebook has had upside of 1000x+.
Steemit is not a household name yet. It is unproven, and it is highly volatile. You're investing in an early stage startup, with extreme potential.
That's what makes it the most exciting cryptocurrency of 2016. And it's why I'm here.
