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[turtlehurricane]

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[Phinnaeus Gage]

GoCoin, founded by Brock Pierce, was able to obtain $500,000 USD of VC capital from their two(?) bedroom home/office above a restaurant in Singapore, with 95% of its customer base residing in the US. Surely, BitPay is worth six times that.

Visit this thread to see how I broke down GoCoin's evaluation: https://bitcointalk.org/index.php?topic=602198.msg6666101#msg6666101

[BitCoinDream]

BitPay raising $30 million of capital, gives itself a $160 million valuation which is ridiculous - an article by The Cryptocurrency Times http://www.usacryptocoins.com/thecryptocurrencytimes/uncategorized/bitpay-raising-30-million-of-capital-gives-itself-a-160-million-valuation-which-is-ridiculous/

This is how black money becomes white.

[QuestionAuthority]

BitPay raising $30 million of capital, gives itself a $160 million valuation which is ridiculous - an article by The Cryptocurrency Times http://www.usacryptocoins.com/thecryptocurrencytimes/uncategorized/bitpay-raising-30-million-of-capital-gives-itself-a-160-million-valuation-which-is-ridiculous/

This is how black money becomes white.

Exactly right. Investments are for more than just percentage of profit.

[franky1]

OP has no clue about business

imagine it this way a shop has stock, they sell that stock for fiat. the fiat is then used to buy more stock. they sell that stock for fiat.
the fiat is then used to buy more stock. they sell that stock for fiat. the fiat is then used to buy more stock. they sell that stock for fiat. the fiat is then used to buy more stock. they sell that stock for fiat. the fiat is then used to buy more stock. they sell that stock for fiat.

in between, the shop, makes a small percentage profit.
this seems to be the extent of the op's overview of business..
well, the shop is not valuated at just the yearly profit, but at the cost of the building they have, the costs of branding, and labour and other things

yes you got that right, if you wanted to buy bitpay you dont just pay $10 for their domain, $2k for a few scripts of website code. if you want the staff to stay, you have to pay, if you want the servers to stay you have to pay and if you want the offices to stay, you have to pay.

then lets get back to the 'stocks'

bitpay doesnt just grab person A's bitcoin, sell it and give person A fiat, meaning they have no holdings. bitpay needs reserves.

so imagine bitpay has $30million in bank account waiting to pay out to person A within 3-5 days. if they did not have this reserve, it would take 3-5 days to get funds from exchanges into their account. and then take another 3-5 days send out to person A, meaning 6-10 business days. so fiat reserves are needed to reduce delays and reduce costs.
and once bitay pays Person A fiat from the reserves, the money from exchanges reimburses the reserve.

now lets talk about bitcoin reserves. to get to offer the best prices, bitpay has access to not one exchange but multiple exchanges.
bitpay does not direct deposit into an exchange. they have reserves already in the exchange ready to instantly sell. so heres how it works
bitpay display to merchants customers a address which is a bitpay cold wallet. they show a price valuation based on the current price from the best exchange value there is. so as soon as a merchants customer deposits their bitcoin. bitpay can instantly sell some coin for FIAT. thus avoiding the 3-6 preconfirms that exchanges need when depositing, because the funds are already inside (the reserve). then bitpay at their own leisure can reinburse that reserve as the reimbursement of reserve does not mind waiting 3-6 confirms.

now then lets put this all together
aswell as labour, infrastructure, brand and other assets
bitpay also has bank reserves and multiple bitcoin exchange reserves..

its not all about the 1% profit.

[IIOII]

That valuation is indeed very high atm. Fundamentally it's not justified.

On the other hand it can be seen as a speculation on future value. That value could indeed be very high, so the investment might be worth it.

I think there's a lot of venture capital pouring into bitcoin businesses right now. Possibly much more than these businesses really need. Many of these businesses will no longer exist five years from now, but some might be extremely successful. Payment providers and exchanges are among those that offer a quite reliable business model with solid participation in a rising bitcoin adoption. So they are an alternative to a direct bitcoin investment - one that is less exposed to the price risk alone. This might explain why there is much interest by VC.

[franky1]

carrying on from before.

imagine 2013 bitpay had
$1m in the bank reserve so they are able to handle upto $1m of transactions in the same 6-10 day reserve recovery period they also need
2200btc in coinbase (~$1m value)
2200btc in bitstamp (~$1m value)
2200btc in kraken (~$1m value)
2200btc in btc-e (~$1m value)

all so that merchants will get the best price and get it in the customers banks in 3-5 days as oppose to 6-10 days

now 2014 they have $30mill capital (bank reserves)
meaning to be able to honour upto $30mill in the same reserve recovery period they have
66600btc in coinbase (~$30m value)
66600btc in bitstamp (~$30m value)
66600btc in kraken (~$30m value)
66600btc in btc-e (~$30m value)
=$30mill bank reserve(capital) and upto $120mill in assets (bitcoins)

without reserves this is what will happen
merchant customer see's a price for equating to 1btc($440), deposits that to bitpay. bitpay waits 10 minutes to confirm the transaction is legit.
in that time the bitcoin price on the exchange has moved($435). bitpay then throw the coins into an exchange. adding a fee to make sure they get confirmed ASAP. an hour later the exchange adds 0.9999btc to th balance. during that hour the bitcoin price has moved again ($430). they sell the bitcoin giving them $429.15 (after tx and exchange trade fee is deducted)

so its been 1 hour 10 minutes and what should have been $440 is now only $429.15.
now the exchange will only send fiat to the KYC'd bank account (meaning bitpays account)
3-5 days later bitpay receive this, and then send this on to the intended merchants account.
3-5days later yo guessed it.

the merchant is contacting bitpay to ask why its taken 6-10 days and also why hav they only received $429.15..

well now i hope you understand the reason for reserves and that if bitpay wanted to sell their business, then capital AND assets (reserves) need to be included

[jonald_fyookball]

GoCoin, founded by Brock Pierce, was able to obtain $500,000 USD of VC capital from their two(?) bedroom home/office above a restaurant in Singapore, with 95% of its customer base residing in the US. Surely, BitPay is worth six times that.

Visit this thread to see how I broke down GoCoin's evaluation: https://bitcointalk.org/index.php?topic=602198.msg6666101#msg6666101

6x = 3mil.

They are claiming 160mil.

We saw what happened with FB ipo with similar p/e.

[Fundmanager23]

I think the valuation is ridiculously low. How quickly could bitpay be replicated both technology, management team, brand, and  trust?
Valuation should be $250 million.

[bluemeanie1]

BitPay raising $30 million of capital, gives itself a $160 million valuation which is ridiculous - an article by The Cryptocurrency Times http://www.usacryptocoins.com/thecryptocurrencytimes/uncategorized/bitpay-raising-30-million-of-capital-gives-itself-a-160-million-valuation-which-is-ridiculous/

I just bought this for $100.  I now declare it's worth $500.  This means I'm a brilliant businessman.



-bm

[ranlo]

I think the valuation is ridiculously low. How quickly could bitpay be replicated both technology, management team, brand, and  trust?
Valuation should be $250 million.

I really hope this is a joke.

We need a lot more information to know what Bitpay's real valuation should be though. Everyone here is just speculating. We don't know their financials, their p&l statements, or anything else we need to understand how the business is running. This information would help get a more solid view as to what the company is really worth.

[jonald_fyookball]

I think the valuation is ridiculously low. How quickly could bitpay be replicated both technology, management team, brand, and  trust?
Valuation should be $250 million.

How quickly?

Within 5 years you might have 8 companies with those assets.
5 years is forever in Bitcion.

But you know what, $160mil or $250mil makes sense IF we are betting on massive adoption
in the next 3-5 years, because then one could argue that their current
revenues and profits could be multiplied many times.

And I think that is what they are factoring into their valuation.

[BittBurger]

Is this the "big" announcement BitPay alluded to on their Twitter with "to the moon!" ?

[maurya78]

Please, bitpay is a pioneer in a virgin market that will likely be worth billions of dollars
Maybe fundamentally too high, but certainly not if you look at how valley VCs gauge potential and allocate capital

[jonald_fyookball]

Please, bitpay is a pioneer in a virgin market that will likely be worth billions of dollars
Maybe fundamentally too high, but certainly not if you look at how valley VCs gauge potential and allocate capital

True, but the barrier to entry is low.  It will possibly be a very crowded space.  Does bitpay have anything innovative?

[bryant.coleman]

Another biased news article, either written under the influence of drugs or bribes from Paypal. If Master / Visa is worth some $200 billion, I don't see any reason why Bitpay can't be worth one-thousandth of that amount.

[Beliathon]

BitPay raising $30 million of capital, gives itself a $160 million valuation which is ridiculous - an article by The Cryptocurrency Times http://www.usacryptocoins.com/thecryptocurrencytimes/uncategorized/bitpay-raising-30-million-of-capital-gives-itself-a-160-million-valuation-which-is-ridiculous/

I just bought this for $100.  I now declare it's worth $500.  This means I'm a brilliant businessman.

-bm

This is exactly what happened, and is still happening, with Bitcoin. Every single day, people pay $500 for something (1 BTC) that less than a year ago, everyone agreed was worth ~$100.

Many assets appreciate and depreciate with time. Automobiles depreciate. Fiat scrip depreciates. Art appreciates. Cryptocurrency appreciates. That's what makes these things sound investments.

[bluemeanie1]

BitPay raising $30 million of capital, gives itself a $160 million valuation which is ridiculous - an article by The Cryptocurrency Times http://www.usacryptocoins.com/thecryptocurrencytimes/uncategorized/bitpay-raising-30-million-of-capital-gives-itself-a-160-million-valuation-which-is-ridiculous/

I just bought this for $100.  I now declare it's worth $500.  This means I'm a brilliant businessman.

-bm

This is exactly what happened, and is still happening, with Bitcoin. Every single day, people pay $500 for something (1 BTC) that less than a year ago, everyone agreed was worth ~$100.

Many assets appreciate and depreciate with time. Automobiles depreciate. Fiat scrip depreciates. Art appreciates. Cryptocurrency appreciates. That's what makes these things sound investments.

you're missing something here.  When something appreciates, it's MARKET VALUE has increased.  I can't just declare it to be more valuable.

-bm

[ranlo]

BitPay raising $30 million of capital, gives itself a $160 million valuation which is ridiculous - an article by The Cryptocurrency Times http://www.usacryptocoins.com/thecryptocurrencytimes/uncategorized/bitpay-raising-30-million-of-capital-gives-itself-a-160-million-valuation-which-is-ridiculous/

I just bought this for $100.  I now declare it's worth $500.  This means I'm a brilliant businessman.

-bm

This is exactly what happened, and is still happening, with Bitcoin. Every single day, people pay $500 for something (1 BTC) that less than a year ago, everyone agreed was worth ~$100.

Many assets appreciate and depreciate with time. Automobiles depreciate. Fiat scrip depreciates. Art appreciates. Cryptocurrency appreciates. That's what makes these things sound investments.

you're missing something here.  When something appreciates, it's MARKET VALUE has increased.  I can't just declare it to be more valuable.

-bm

Honestly, this is no different than the companies around here that are making, say $500 in profit in 6 months and IPO at a valuation of $10m and still raise it all. People are getting stupider and assume that everything related to cryptos are automatically trillion-dollar companies just because we're talking about Bitcoin. As long as people keep making stupid decisions, companies will continue to be overvalued like this.

[Sindelar1938]

The valuation looks a little frothy
The SV VC's discounting a very, very optimistic future for bitcoin by the looks of it
How defensible is bitpay's tech? Does anybody have any insight on this?