When Moon? When Lambo?
Tags: Cryptocurrency, Cryptocurrency Investment, Crypto, Bitcoin

Images in composite from Lambo Gallardo & Gnuckx

What is a rational crypto valuation when your crypto lands a lambo on the moon?

I admit it, I follow a ton of Crypto groups on Facebook. And a recurring question is a variation of: “Do you think X coin will get to Y value in Z time?”

Then, you’ll get answers both sincere, as well as mocking. Mostly mocking and sarcastic.

The thing is: nobody really knows. Who knew Amazon, which originally started as an online seller of books would eventually wind up selling everything under the sun, and worth nearly $2,000/share?

No one, not the analysts, not Jeff Bezos, could have told you that AMZN would have gone from nothing to many-somethings.

But, we can at least apply some logic, some calculations, to get to a reasonably arguable number. Arguments to moon-shot valuations mostly go along the lines of, “Well, if so-and-so crypto went to $5, because of its total supply it would be valued more than all the money in existence!”

Something like that.

Take KIN for example. Kin has a total supply of 10 Trillion, and is currently valued at $0.000065. I see questions along the lines of, “Do you think KIN can go to $5?”

Market cap of $50 Trillion? Really?

The current US debt is 21 Trillion. C’mon people, let’s do some simple calculations before even posing such lambo-moon questions, shall we?

The counter argument is that price is solely determined by the price one is willing to pay at that time. That the price of $0.000065 was the last price the last person who purchased KIN was willing to pay for one.

Therefore, all McAfee has to do is sell himself, on the open market, a single BTC for a $500,000 dollars. Dick-eating averted.

Meaning, the market cap is something that is temporary. It avoids supply vs demand questions, and is ultimately not what would determine a currency’s value.

The other argument is that price to fiat currencies will no longer be a measure once bitcoin, or some other crypto, becomes a universal currency. It will cease to be pegged to a fiat currency such as the USD, and instead will be pegged to something like Bitcoin, with its associated Satoshis.

Fine, but until that grand day we have fiat currencies, and the endless question of “When Lambo Moon?” And no, they are not thinking in terms of Satoshis. No, they are thinking in terms of cold hard US Dollars!

Well, one way to determine a future value is if we compare any crypto to another crypto that has already mooned, such as Bitcoin. If we take any of the top 100 coins on CoinMarketCap.com, and did a “what if”? for example.

“What if X coin was equal in value to what BTC is now?”

I think that would be an answer that gives some rationality, some top to a value of when Coin A lambos on the moon.

Czech this sheet out:

You’re welcome. Here’s a viewable Google Docs link

What this shows is what the price would have to equal if it were valued the same as Bitcoin is currently (October 3rd, 2018). This also shows what the percentage increase would have to be, as well as what $100 dollars invested would equal if it actually achieved that valuation.

What this spreadsheet does NOT say

This does not say that ALL coins will achieve these lofty projections, it only shows a ‘what if’ scenario playing out.

For example, in order for Ethereum to reach the same Market Cap as Bitcoin right now, its price would have to increase by 495%, from $222 to $1,100. And $100 invested in ETH would then increase to around $596.

Alternatively, if you take the 100th crypto by market cap, DAI, and applied the same calculation, $100 invested would then equal nearly $200,000 if its valuation equaled Bitcoin’s current price value based on it’s current Market Cap.

DAI’s price would also have to increase by 198,000%, so it’s a humungous assumption, but with crypto at this point and time — anything goes!