NEW: Forecast Bitcoin companies with mNAVigator
Over the past year new metrics have been coming at us from all directions.. mNAV, BTC yield, and don't get me started on BTC Torque. But you don't have to be Jeff Park to make sense of this.
Let's go back to basics when evaluating these companies. Simplify, then accelerate.
Let's focus on these 3 key questions:
1. BTC accretion: How much will the company's Bitcoin holdings grow over time?
2. Future mNAV: What premium will the market pay for the shares in the future?
3. BTC price growth: How much will Bitcoin appreciate?
That's all we need.
So a way to calculate the future share price is to:
1. Calculate the BTC accretion multiplier over your timeframe
For example, an average of 10% per year for 10 years results in a multiplier of around 2.6X. On your calculator that's (1 + 10.0%)^10 = 2.59x.
2. Adjust for any change in mNAV premium from current to the future
If the mNAV is 2 today, it might increase to 4 (2X multiplier) or go down to 1 (0.5X). As we've covered in our articles, this value is likely to fluctuate over time.
3. Account for Bitcoin price appreciation
We use the Bitcoin power law for our estimate, but you can use your own. If we assume the price is $100k now and will be $1.5M in 10 years (as the power law suggests), that's a multiplier of 15X.
4. Apply these multipliers to the current share price
Notice that we don't consider the number of future diluted shares, which I find the hardest to estimate and wrap my brain around. By focusing on just share price and not market cap, we can ignore the share count.
Here's a full example:
With 10% annual BTC accretion over 10 years (2.6x), MNAV changing from 2.0 to 1.8 (0.9x), and Bitcoin price growing from $95,000 to $500,000 (5.26x), a $400 share would reach..
$400 × 2.6 (accretion) × 0.9 (MNAV adjustment) × 5.26 (BTC price increase) = $4,926 per share
Then we can play with different values to test different scenarios.
To make that easier, we've set up a new tool called mNAVigator, available for Pro members (free trial available).
How to use it:
1. Start by choosing which company you want to forecast and how many shares you have. We'll fetch the current share price for you.
2. Then fill in the average BTC growth per year over the timeframe, how long you want to forecast for, and the change in mNAV.
3. Fill in the future BTC price in X years. By default we use the Bitcoin Power Law forecast, which has been very accurate so far. Here we've set it at a conservative 500K in 10 years:
4. See your forecast. You can then go back and change any of the values to see how they affect the final share price, your portfolio value and BTC holdings, as well as your wealth in BTC terms based on the future BTC price - because the whole goal is to outperform BTC.
I've found this tool really useful to sanity check my own assumptions.
For example, @_ALTBG is aiming to stack 1% of all BTC in 8 years. I found by using the mNAVigator that they will need an average yearly BTC growth of around 107% - which I did not know.
It's also interesting to note that if the BTC groth of a company is low, the share price may go up a lot due to BTC increasing in price, but in BTC terms you might just be treading water, as shown in the screenshot above.
mNAVigator is available for Pro members now, and there's a free 7 day trial if you just want to test it out.
We appreciate your feedback!
Customer comments:
Just became pro member and I’m incredibly impressed with the mNAVigator, no more FOMO cause I can see the “simulated” opportunity cost. And actually utilize the BTC yield they told us the goal of at the earnings call.
This is like a game changer cause they have now “told us” how much the shares will be worth by just holding. I also like the touch of total value in bitcoin since that’s the ultimate goal? Exceptional product.
Johnny B
Just signed up. Ya'll are both doing an incredible job. $9.99/month is 100% more than worth it!
Derek Hui