Analysis

Hotx Valuation

The value of a subject is based on the function of assumption. A product’s value is based on the demand and supply which is generally rooted in the public’s sentiment of how desirable the product is. In this case, Hotcoin is the indicator that reflects the public’s sentiments about the true prices of coins.

Collating public sentiments is hard to achieve. Nevertheless, it is a very valuable piece of information for both the buyer and seller. Quantifying public sentiments can be correlated to interest in coins. Let’s take a look at Google.

The market capitalization of Google is $785.25 billion. In a day, this behemoth has a total average of 3.5 billion daily searches and 1.2 trillion searches in a year.

Market Capitalization refers to the total value of all of a company’s shares of stock. It is calculated by multiplying the price of a stock by its total number of outstanding shares. For example, a company with 50 million shares selling at $90 a share would have a market cap of $4.5 billion.

For keywords related to crypto (such as Bitcoin, ICO, Ethereum etc.), there are 34,087,900 searches per month and approximately 35 million for other related keywords. Bitcoin has the highest search on Google at a rate of 13.6 million per month. Followed by Ethereum at 2.24 million, Binance at 74,000 and XRP at 450,000 per month.

To get an approximate valuation of HotX, we take the percentage of searches related to crypto per month- as it is a reflection of public interest in cryptocurrencies. We then find the market capitalization of searches related to cryptocurrencies from the percentage obtained.

Lastly, we get the long-term valuation of our token by dividing the market capitalization of our searches against the total supply of HotX tokens, which is 900 million.

Percentage of Searches: 35000000/(3500000000*30) x 100% = 0.0003333333 = 0.0333333%

Market Capitalization (Searches) = 0.0003333333*$785,250,000,000 = $261,749,974

Valuation per token = $261,749,974/900000000 = $0.2908333

From the above calculation, we can deduce the long-term valuation of each HotX token should be around $0.30. However, we have to take into consideration that crypto is still a field that is relatively novel, and interest in it fluctuates from time to time. Gauging from public interest in crypto (with information and data obtained from Google Trends), it is observed that we have already moved on from the hype in crypto and interest is slowly stabilizing at around 35 million searches per month.

 

Analysis by: Soh Qiling, Data Analyst Intern, Katalyst. 

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