Editing Bitcoin
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Bitcoin is a currency. What makes the currency unique is that it's the most popular cryptocurrency. Research suggests that the most popular cryptocurrency will maintain its purchasing power for much longer than any other currency. In other words, the cryptocurrency will be a much better currency. | Bitcoin is a currency. What makes the currency unique is that it's the most popular cryptocurrency. Research suggests that the most popular cryptocurrency will maintain its purchasing power for much longer than any other currency. In other words, the cryptocurrency will be a much better currency. | ||
The degree of risk associated with an investment in Bitcoin is 'medium', with the | The degree of risk associated with an investment in Bitcoin is 'medium', with the shares having an adjusted beta that is 42% above the market (1.42 vs. 1). | ||
Assuming Bitcoin's share of the money supply increases to 10% (from 2.2%) and other assumptions, then the Stockhub users estimate that the expected return of an investment in Bitcoin over the next five years is 5x, which equates to an annual return of 39%. In other words, an £100,000 investment in the | Assuming Bitcoin's share of the money supply increases to 10% (from 2.2%) and other assumptions, then the Stockhub users estimate that the expected return of an investment in Bitcoin over the next five years is 5x, which equates to an annual return of 39%. In other words, an £100,000 investment in the company is expected to return £500,000 in five years time. | ||
Assuming that a suitable return level over five years is 39% per year or less, and Bitcoin achieves its expected return level (of 39%), then an investment in Bitcoin is considered to be an 'suitable' one. | Assuming that a suitable return level over five years is 39% per year or less, and Bitcoin achieves its expected return level (of 39%), then an investment in Bitcoin is considered to be an 'suitable' one. | ||
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=== What's the expected return of an investment in Bitcoin? === | === What's the expected return of an investment in Bitcoin? === | ||
The Stockhub users estimate that the expected return of an investment in Bitcoin over the next five years is 5x, which equates to an annual return of 39%. In other words, an £100,000 investment in the | The Stockhub users estimate that the expected return of an investment in Bitcoin over the next five years is 5x, which equates to an annual return of 39%. In other words, an £100,000 investment in the company is expected to return £500,000 in five years time. The assumptions used to estimate the return figure can be found in the table below. | ||
Assuming that a suitable return level over five years is 39% per year or less, and Bitcoin achieves its expected return level (of 39%), then an investment in Bitcoin is considered to be an 'suitable' one. | Assuming that a suitable return level over five years is 39% per year or less, and Bitcoin achieves its expected return level (of 39%), then an investment in Bitcoin is considered to be an 'suitable' one. | ||
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|The Stockhub users estimate that especially given the key benefit of the asset, the peak market share of Bitcoin is around 10.00%, and, therefore, suggests using the share amount here. As of 14th November 2023, Bitcoin's current share of the market is estimated at around 1.77%. | |The Stockhub users estimate that especially given the key benefit of the asset, the peak market share of Bitcoin is around 10.00%, and, therefore, suggests using the share amount here. As of 14th November 2023, Bitcoin's current share of the market is estimated at around 1.77%. | ||
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|Which distribution function do you want to use to estimate | |Which distribution function do you want to use to estimate company revenue? | ||
|Gaussian | |Gaussian | ||
|Research suggests that the | |Research suggests that the revenue pattern of companies is similar to the pattern produced by the Gaussian distribution function (i.e. the revenue distribution is bell shaped), so the Stockhub users suggest using that function here. | ||
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|What's the estimated standard deviation of | |What's the estimated standard deviation of company revenue? | ||
|50 years | |50 years | ||
|Another way of asking this question is this way: within how many years either side of the mean does 68% of | |Another way of asking this question is this way: within how many years either side of the mean does 68% of revenue occur? Based on Bitcoin's current price (i.e. $37,257.50) and Bitcoin's estimated lifespan (i.e. 250 years), the Stockhub users suggest using 50 years (i.e. 68% of all sales happen within 100 years either side of the mean year), so that's what's used here. | ||
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|What's the current value of the investment? | |What's the current value of the investment? | ||