In an attempt to see how far Nash can go to the upside I created this spreadsheet to see how far up the sky is assuming it’s the limit.
Before taking a look there are a few flaws worth pointing out;
- The monthly volume column is calculated based on Binance’s monthly volume relative to the total crypto market cap. This is flawed for two reasons one being that volume is only loosely correlated to the market cap. The other being that generally Binance has a ~10% share of the total monthly trading volume which should be taken with a large grain of salt (CZ’s bots etc…)
- The second major issue with this spreadsheet is that I’ve scaled everything linearly i.e. as the Bitcoin price increases so does the total crypto market cap and thus the monthly volume (BTC’s market dominance is also fixed at ~50%). These things will all increase together but not necessarily in a linear fashion.
- I’ve included indicators in column M to show where we’d need to be to achieve the same monthly volume as the NYSE and NASDAQ (@ethan) which would be somewhere between 1 and 4 trillion a month however both of these markets include derivatives and at this point Nash doesn’t have a derivatives trading licence and there’s no guarantee that derivatives would need to use the same matching engine (which means no fees for stakers, also it’d take > 25yrs to try and steal their market share if it’s even possible).
- I’ve also run the spreadsheet all the way up to a total crypto market cap of 80 trillion which would be roughly equivalent to global GDP, the approximate market cap of all the worlds stock exchanges and also a little under the global broad money supply. It’s extremely unlikely that crypto will ever reach that level so I’d say that this is the sky/limit.
Part of the inspiration comes from cryptovoices base money page which assuming bitcoin can absorb all of gold, fiat or gold and fiat would put the price at 0.5-1.5 million which is cool to think about but unrealistic, Bitcoin’s market cap would be 10-30 trillion at that point.
The other facts scattered around the spreadsheet come from visualcapitalist’s info graphic from 2017 illustrating the size of Bitcoins market cap in relation to other markets and assets.
The way I use this spreadsheet is generally to pick a Bitcoin price I think is achievable say 50k and then take a look at what the returns would be like if the price was 5k. The logic being that the dividends in columns E - I are calculated based on a 10% share in the total monthly volume (assuming the user is staking for 2yrs i.e. receiving a 75% share in fees collected and the average trading fee is 0.2%). So at 5k I’m assuming Nash can capture 1% of the total market volume when the price is at 50k. Top 30 exchanges seem to consistently capture about a 1% market share and we’d need to be in the top 5 to get above 2% so this seems realistic enough.
Given recent news I’d say that in the medium term we have a good chance of taking over CoinbasePro in terms of volume (probably the only exchange with accurate volume figures thanks to US regulation) and stealing a nice slice of Binance’s market share assuming we can get the liquidity (if we can’t get liquidity then we might as well go home now). My 2-3yr target for Nash is 12 billion in monthly volume putting the token price at $40-$80 and monthly return at ~$3.3k for 10k tokens. 12 billion is approx 1% of the NYSE’s monthly volume and equivalent to binance’s claimed volume in a bear market (the bull market will have returned by 2021-2 and Binance was supposedly doing 90bil monthly volume in the last bull market). At that point Bitcoin would be around 30k well short of the 100k, 200k, 300k 1mil and 1.5 mil predictions that have been floating around.
This spreadsheet is just a little experiment with numbers I wanted to do, if you’d like to suggest any additions I’m open to modifying it however given it’s completely speculative and not likely to be even remotely accurate (see column A for date at which we’ll be seeing the desired returns) I’m not taking it that seriously. As usual none of this is in any way financial advice etc, etc…
Edit: credit to Nick at stakingnex.io for providing a sweet interface to double check my maths.