Why Long term coin is undervalued?
Valuation is generally a subjective thing but warren buffet has given a good definition of valuation for the last 50 years or so and any wise investor would take it as a benchmark of valuation. I know that the crypto community doesn’t like buffet much but we think that his investing methods are still powerful for crypto investors to apply. now, how does valuation work?
Buffet says that if you invest 100 $ and get 100 $ back on top of that after 10 years it's a fair deal and it would be properly valued. Meaning that if you double your money in ten years then you got a fair deal.
Now, if you apply the same investing principles in long term coin then the valuation becomes as below :
With a mere 2 million USD worth of initial investment and just adding the top 2 fund managers’ returns for the sake of calculation, we get a valuation of 200 Million instantly. Now, this can grow the price of the token massively if we have a fund of 50 to 100 million to manage.
For the sake of calculation, we are calculating 100 % returns year on year although these fund managers have given more than 250 % on average in a year when bitcoin has given only 10% returns. (the year 2021 to 2022).
2,000,000 USD doing 100% for ten straight years then it becomes 2 billion worth of portfolio. If we charge 10 % for this then our token’s valuation becomes 200 million USD. We think this is a fair deal. We are not saying that we will charge anything. This is for the sake of valuation-based calculation.
You can check the returns of the top 2 fund managers here fitting in our criteria: