Along with the wild price swings, Colas sees bitcoin losing more market share to competitors, and "at least four crashes" of 40 percent or more.
"Bitcoin and cryptocurrency are hard to value and their economic utility relies on use cases that are not yet built. Of course the volatility we've seen will continue," he said.
It's been an amazing year for crypotcurrencies, which serve as a digital method of payments and, in some views, as an alternative to gold and other safe haven assets. While bitcoin has garnered the lion's share of the headlines, there are now 36 cryptos that have market caps greater than $1 billion, according to CoinMarketCap.
Colas arrived at this price range by comparing the amount of bitcoins to the amount of $100 bills in circulation.
"Bitcoin's primary 'real' use case right now is personal asset protection," he wrote. "Yes, that includes money laundering and tax evasion. But it also incorporates the legitimate desire of honest people living in countries with less-than-exemplary rules of law to shield some of their assets.
"At the moment, the primary instrument used globally for these purposes is the $100 bill."
If bitcoin's value came to 10 percent of the total $100 bills in circulation — $110 billion divided by 17 million bitcoins — that would approximately produce the $6,500 bottom end of the range. Using 33 percent would get the $22,000 upper range.
"At the average of the high and low, we get to $14,035. That's not far off the current trading price, which gives us comfort we're on the right track with our valuation," Colas wrote. [It actually would represent about an 11 percent drop from Wednesday's price.]
"The only way it goes substantially higher is if/when someone comes up with a large-scale business that uses bitcoin. That may come in 2018. But for now that scalable use case is asset protection, so that's how we value bitcoin today," he added.
WATCH: An analyst discusses the use of bitcoin other than trading.