/biz/ - Business & Finance

I can tell literally none of you have a fundamental understanding of credits and debits. Simplified:

>Starting cash balance: $60

>D: Acquire $60 asset
>C: Lose $60 cash

>D: Acquire $70 cash
>C: Sell $70 asset

>D: Acquire $80 asset
>C: Lose $70 cash
>C: Incur $10 liability

>D: Acquire $90 cash
>C: Sell $90 asset

>D: Pay off $10 liability
>C: Lose $10 cash

>Ending cash balance: $80

"Potential" gains are not counted as a loss. Just because I could've made millions off the BTC I sold many years ago doesn't mean I get to deduct millions in expenses every year.

Are there any Excel plug-ins for crypto data similar to Capital IQ or Morningstar? Tired of sourcing this shit manually.

>be me
>23 years old, M&A Valuation analyst
>deals are usually small-cap companies in the southeast -- boring shit
>still, anyone of you finance fags would kill for my "comfy" job
>but all I want to do is spend my days learning even more about crypto and trade all day

I use basically all of my off-time and even time during work researching crypto and random altcoins. This shit is so interesting. Finance bros, how do I make the shift?

>Average cost of mining BTC: $3,000 - 4,000
>Average Price-to-Book (leveraged) ratio of publicly traded companies: 3.3x
>Average Price-to-Assets (no leverage) ratio: 2.5x

>2.5 * $3,000 = $7,500
>2.5 * $4,000 = $10,000
>3.3 * $3,000 = $9,900
>3.3 * $4,000 = $13,200

>High: $13,200
>Low: $7,500
>Mean: $10,150

The market is seemingly efficient and knows what it's doing. The 2-3x multiple represents both profit for the miners and the speculative value of BTC, similar to how a higher P/B ratio for a company means that investors see future/additional value in a company's assets. True BTC pricing can only be estimated as a function of mining cost, currently. Valuing BTC at cost alone is mindless, as nobody would mine if the coin couldn't then be turned for a profit. Historically, mining costs have existed in a 2-3x relationship with BTC value. Miners usually achieve a 60% profit margin. For example, in early 2014 when BTC was ~$600, the price to mine was roughly $200 per coin.

Disclaimer: this method is makeshift in more than one way, but it's still interesting. Try applying the 2-3x P/B rate to BTC's historical mining costs and see for yourself.

t. Valuation Analyst. My job is to literally value companies. Obviously cash flows aren't a thing for crypto, so comps are the only option.

>Average cost of mining BTC: $3,000 - 4,000
>Average Price-to-Book (leveraged) ratio of publicly traded companies: 3.3x
>Average Price-to-Assets (no leverage) ratio: 2.5x

>2.5 * $3,000 = $7,500
>2.5 * $4,000 = $10,000
>3.3 * $3,000 = $9,900
>3.3 * $4,000 = $13,200

>High: $13,200
>Low: $7,500
>Mean: $10,150

The market is seemingly efficient and knows what it's doing. True BTC pricing can only be estimated based on mining cost, currently. Valuing BTC at cost is mindless, as nobody would mine if the coin couldn't then be turned for a profit. Historically, mining costs have existed in a 2-3x relationship with BTC value. Miners usually achieve a 60% profit margin.

Disclaimer: this method is makeshift in more than one way, but it's still interesting. Try applying the 2-3x P/B rate to BTC's historical mining costs and see for yourself.