Cryptocurrencies 2018 Scenario Analysis

Scenario analysis using market capitalization

* Assumption of supply slightly increasing:
ETH +10 mil per year
XRP +5,000 mil per year

Historical Market cap (m) Supply (m) Price
BTC peak cap 320000 16 20000.00
ETH peak cap 135000 100 1350.00
XRP peak cap 150000 38740 3.87
Scenario A Market cap (m) Supply (m) High
BTC 320000 16 20000.00
ETH 320000 110 2909.09
XRP 320000 40740 7.85
Scenario B Market cap (m) Supply (m) Mid
BTC 100000 16 6250.00
ETH 100000 110 909.09
XRP 100000 40740 2.45
Scenario C Market cap (m) Supply (m) Low
BTC 50000 16 3125.00
ETH 50000 110 454.55
XRP 50000 40740 1.23

Scenario A - the prices of ETH and XRP if they reach the market cap of Bitcoin at its peak. This is a ceiling estimate, since it's currently not likely that massive amounts of new funds come into this space. Likely there will be some cannibalization into Bitcoin.

Scenario B - an arbitrary market cap of 100,000 million, the lower end of the average scenario if the crypto market spreads out evenly, divesting from Bitcoin the most, and some flows going into the other altcoins not mentioned here.

Scenario C - an arbitrary market cap of 50,000 million, lower than current market cap, a bearish scenario.

I use market capitalization to estimate fund flows, though it must be noted that it is not a 1-to-1 relation - (FF x Liquidity Factor = change in Market Cap) - where liquidity factor is a measure of the unwillingness of buyers or sellers to put their coins up for trade - the more unwilling they are, the more fund flows will affect prices and thus market cap.

Increase of supply is estimated by simple linear extrapolation of implied circulating supply, derived from (market cap / closing price).

2 Replies to “Cryptocurrencies 2018 Scenario Analysis”

Leave a Reply

Your email address will not be published.