The Bull Case For BNTY - Analysis
Disclaimer: This is not investment advice, please do your own research. I do own BNTY tokens.
In this piece, I outline the arguments for why I am bullish on BNTY and why I believe its fair value to be $7 per token, once the Bounty0x ecosystem realizes its full potential.
Bounty0x launched its Alpha platform back in mid-2017. After testing the concept and getting a lot of positive feedback, the team decided to hold a token sale in December of 2017 with a hard cap of $1.75 Million.
The token sale sold out in seconds, and after getting listed on Kucoin, BNTY skyrocketed from a price of $0.0165 to over $0.95 per token in under 6 weeks. This move was largely caused by users trying to buy BNTY for future use on the platform.
However, due to the the brutal market downturn in 2018 and 2019, the token has now retraced back below its token sale price as the number of available bounties has slightly fallen. At the time of writing, BNTY has a market capitalization of under 800,000 USD.
According to messages from the team on Telegram, Bounty0x Ltd has been profitable for much of 2018, and is now considering to hold a Series A equity round.
A lot has happened since the token sale back in late 2017. To keep this report as clean as possible, I will point these developments out in bullet points.
- 55,000+ users
- $5M+ in bounties paid
- 950,000+ bounty submissions made by Bounty Hunters
- 1.1M+ BNTY are staked (locked up) by Bounty Hunters and Bounty Sheriffs on the Bounty0x platform
- 500,000+ monthly pageviews
The Bounty0x team has also successfully started to build an ecosystem around the BNTY token. This is important as the token's value stops depending on the success of a single platform.
The first major move in this regard is Publish0x, the platform you are reading this article on right now.
On this platform, users can tip great content in BNTY (think of it like a significantly improved Steemit).
Since its launch, Publish0x has been an astounding success:
- 45,000+ tips made in BNTY (The average tip is worth 10 BNTY)
- 2,300+ articles written by users
But that’s not all, the founder of the platform (Dan Bainbridge, the founder of Big Bird VC and an early Bitcoin investor), has also hinted on multiple instances that they are planning to soon also incorporate BNTY staking functionalities on Publish0x.
Online rewards market
Online rewards and micro-tasks is a market that has not lived up to its full potential yet.
The reason is simple, most micro-tasks are in the $1-3 per reward range, but fees charged by payment processors like PayPal are often even higher than that.
Bounty0x is on a quest to disrupt this market with the removal of rent-seeking payment processors and the introduction of a unified currency.
The BNTY bull case
I have already shown that BNTY is one of the few tokens that is actually actively being used for its utility.
However, some claim that although BNTY is indeed used, the token itself is actually not necessary for its ecosystem to flourish.
So, let's now explore why that claim is incorrect and why it was a brilliant decision from the Bounty0x team to bring the BNTY token to life.
By creating a native token for online rewards, and by giving a small amount of the token to individuals using the BNTY ecosystem, the Bounty0x team has created an incentive structure where all users are financially motivated to grow the ecosystem further.
The marketing impact of this is already very noticeable with a 55,000 people userbase, but it will be absolutely unprecedented as soon as the BNTY ecosystem starts growing into the hundreds of thousands of users.
I estimate that as soon as the BNTY ecosystem reaches 200,000 users, it will enter a golden spiral.
This golden spiral consists of the following:
- Existing Bounty0x users buy BNTY to interact with the ecosystem, and hence push up the price
- These users are now financially incentivized to promote the BNTY ecosystem since that will increase the value of the tokens they hold
- The promotion by existing users attracts new users, which restarts the cycle
Assuming that the BNTY ecosystem eventually peaks at just 800,000 users (conservative considering that the freelance and micro-task industry has 500+ Million potential participants), and that the average user continues to buy $100 worth of BNTY, that is a total of 80 Million USD in liquid cash that is entering BNTY.
Now, assuming even a moderate cash amplifier of 20x, that would result in a $1.6 Billion market capitalization for BNTY. Or a BNTY price of over $7 per coin.
But that’s not all. As tens of thousands of users join the BNTY ecosystem every month, buy BNTY, and keep pushing up the price, major media companies will start to take notice.
See, media companies like WPP Group (worth $19 Billion) are known to spend $50+ Million on just a single marketing campaign.
Since bounties and micro-tasks are an effective marketing strategy, it would not be surprising if these media companies then start buying chunks of $5M worth of BNTY to use for their marketing campaigns.
In fact, from my experience in the media industry, these companies are likely already keeping an eye on bounties as a new marketing opportunity for their clients.
And if large media companies start buying BNTY in bulk, we reach a point where calculating a potential ceiling for the BNTY price is no longer possible.
Many 2017 ICOs have already run out of money after mismanaging the $30M+ they raised.
On the other hand, the Bounty0x team has purposefully had a low raise to keep a big portion of the tokens, and kept their heads down and created value.
As soon as the necessary weight is gained for BNTY to initiate its golden spiral, there aren’t many barriers left stopping it from reaching a $1.6 Billion market capitalization.
Or, in other words, a price of $7 per BNTY token.