A thought on price 2019-10-30

Market
1

As of writing, price is roughly $0.94, which can be taken as C/S where C is market capitalization and S is supply. Currently this ratio is roughly 23,498,337/24,792,600 ≈ 0.94.

Let’s consider the price based on a projected market cap of $1 Billion (Roughly Monero’s market cap). This is roughly a factor of 42x the current market price. At current supply, this would bring the price up at a factor of 42x (roughly $40 unit price).

Of course, we’re not going to see a 42x growth over night. However, if we were to project this market cap figure out a certain distance (D) into the future, we come up with a price less than $40.

(C*42)/(S*D)

It’s clear that if D=42, we maintain the same price of $0.94 at the projected $1 Billion market cap level. However, in this example D is a measure of time from Grin’s inception (288 days as of this post). This puts our projected $1 Billion market cap epoch at 42*288 days from now, 12096 days or roughly 33 years.

This seems like an improbable timeframe for a $1 Billion market cap valuation. Especially when we observe that other currencies achieve such valuations in much shorter timeframes. For example, Monero is a little over 5 years old.

Consider the same timeframe of Monero. Monero is 2,021 days old. That gives us 1,733 days from now for Grin to be the same age:

D = (days + age)/age
  = (1733 + 288)/288
  = 7.0173611111

Future Price = (C*42)/(S*D) 
             = C/S * 42/D 
             = 0.94 * 42/7.0173611111
             = 5.6260465116

(Note: C/S is current price)

We see that after 1,733 days from now we can measure price to be roughly $5.63 at a $1 Billion market cap value. We’re looking at a roughly 499% ROI in todays prices.

Hope this was interesting for you all. Please correct my math if I made any mistakes. I created a Desmos chart for these calculations for more perspective: https://www.desmos.com/calculator/7tb3stjxzy

[edit]: include a variable for valuation: https://www.desmos.com/calculator/ewhlwgnk65

1 Like
2

I’ll add that I think $1 Billion valuation for Grin is reasonable, and possibly conservative considering where the overall cryptocurrency market will be years from now. If we consider an overall increase in the cryptocurrency marketplace we could factor that into the ROI. A 10x growth in the overall market would give a 4990% ROI for Grin.

These numbers all depend on perspectives and speculation, but this may be reasonable speculation.

Also, nothing I show here is financial advice. It is merely some analysis to be shared.

3

Super bullish idea: Grin’s valuation at $165,835,731,453 (BTC current valuation from coinmarketcap) in 10 years gives a $489 unit price. We would observe this if Grin has the same level of success as Bitcoin had for it’s 10 year lifespan.

4

Bitcoin should start to hiccup after the 2020 halving or 2024 due to mining economic instability because of the halving. If Grin gains popularity and people finally start to understand that GRIN monetary policy is far superior than Bitcoin, then your prediction might be right :wink:

Just my 2 Grin

5

Could you explain more reasoning behind this argument? I’m curious as to what you mean by hiccup.

6

Think about this…

What halving does? It sharply reduces the block award by 50%.
Who will immediately feel this? The miners!

The miners are the security of the BTC protocol. It is their believe that the prices “should” go up because of the artificially reduced emission. If the prices do not go up sharply, many of them will be on a loss.

Now, who cares about the miners making money? Nobody, but themselves! Do you think that BTC can keep up with its price in order to keep its miners profitable? :wink:

And here comes GRIN with its smooth and linear emission forever! Its still a deflationary currency, but not that harsh as Bitcoin.

Just my 2 Grin

1 Like
7

I’m trying to understand what’s being sad here. Price does not keep up with a demand to mine, rather the demand to mine keeps up with price. If price does not change during a halving event, we will just see hash rates decrease. However, it’s arguable that the market might respond to a dramatic lowering in emissions with higher bids on the market which could increase unit price.

So far all I can take from this is that a halving event can cause volatility. If volatility is what you mean by hiccup, then yes, Bitcoin should start to hiccup during its next halving events as always.

8

I am saying that this halving thing is a shock for the whole network and economic system. Its very brutal, 50% less in just one day.

9

But it’s not so shocking if expected. :thinking:Anticipation of the event should allow plenty of time for the network to adjust, no?

10

If we assume most of Bitcoin’s value comes from its security/ trust minimization (https://twitter.com/NickSzabo4/status/1077317105148547072?s=20) if hashrate decreases, then so does Bitcon’s security, thus so does it’s value.

Cutting the block subsidy is arguably the biggest single risk to bitcoin’s security, because, you’re cutting the reward paid to miners for securing the chain. At some point reducing the block subsidy( and reducing monetary inflation rate) won’t be supported by an increase in price( it will lead to a decreae) because the reduced block subsidy won’t be enough for the same amount of miners to secure the chain. Eventually chain security will rely 100% on a fee-based market, so Bitcoin could ultimately be doomed with a fixed supply. This is one of the primary reasons why Grin doesn’t have a fixed supply and doesn’t have an arbitrary block halving.

3 Likes
11

This is an interesting argument or prediction, but I’d like to see a little more in-depth to these arguments.

12

这个论点不错，但是比特币终究是比特币。其它都是山寨币