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In this sheet, we try to place a valuation on ICONOMI's ICO token. The token provides its holder with a stream of revenues based off the management fees associated with the funds on the ICONOMI platform. In the short-term, these will be a passive ETF-life fund and an actively managed fund. In the long term, they will launch a marketplace in which anyone can offer financial instruments; a portion of fees associated with those will also go to tokenholders. Finally, if the team hits certain performance targets (beats a baseline), they will earn more fees, a portion of which will go to shareholders. The whitepaper does not publish enough information to do an accurate model, but this should give you a sense of how the system works and what value the token might have as a financial investment.
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Fundamentally, we estimate ranges of overall earnings and then assume a range of price-earnings ratios based on existing financial-investment peers. Use the below to estimate the price based on different conditions--or find the conditions under which the going price for ICONOMI tokens makes sense.
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Value of ICONOMI TokenToken Price
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ICO Sale Price*$0.06
Financial forecasts not given
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Average Case$0.0147
Stable crypto market, moderate adoption, average PE ratio for an asset-management firm
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Pessimistic Case$0.0005
Slowing crypto market, low adoption, poor fund performance, low PE ratio
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Optimistic Case$0.2441
Growth in crypto market, high adoption, great fund performance, and a PE ratio equal to the S&P 500
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* ICONOMI will distribute 85 million tokens to backers. As of Sept 22, they had raised over $5,175,000, yielding an average price of .0609.
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ASSUMPTIONS
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Average SenarioPessimistic SenarioOptimistic Senario
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INDEX (passively held)PERFORMANCE (actively managed)INDEX (passively held)PERFORMANCE (actively managed)INDEX (passively held)PERFORMANCE (actively managed)
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Fees charged0.50%1.50%0.50%1.50%0.50%1.50%
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Performance fees (portion of profits earned during exceptional years)N/A20%N/A20%N/A20%
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Management Costs (as a portion of fees--the rest go to earnings) [3]15%67%50%80%15%50%
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Total assets under management (AUM)$36,000,000$1,575,000$2,500,000$750,000$156,000,000$6,600,000
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Market performance of managed funds (yearly returns above the benchmark). Returns are typically lumpy in the industry, so this is an oversimplification.N/A10%N/A0%N/A20%
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Total yearly earnings$153,000$39,296$6,250$2,250$663,000$313,500
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Assumed P/E Ratio [2]7.635.8925
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Total number of tokens100,000,000100,000,000100,000,000
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Price per ICN Token (USD)$0.0147$0.0005$0.2441
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Assumptions for AUM
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Total Crypto Market cap (for reference only)$12,000,000,000$12,000,000,000$12,000,000,000
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Total non-Bitcoin Crypto Market Cap (TNABCCC)$3,000,000,000$2,500,000,000$6,000,000,000
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Percent of total TNABCCC held in fund1.00%0.05%0.10%0.03%2.00%0.10%
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How much of the fund is held in BTC? [1]20.00%5.00%0.00%0.00%30.00%10.00%
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TOTAL$36,000,000$1,575,000$2,500,000$750,000$156,000,000$6,600,000
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1: Given the availability of financial instruments tied to BTC, we assume the majority of funds on ICONOMI will be non-BTC. BTC may still be used as a ballast, but if ICONOMI focuses on BTC, there are other instruments out there for interested investors.
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2: P/E should take into account the market's expectations of interest rates and the growth in earnings. As a reference, here are the current P/Es of some of the largest asset managers traded publicly in the US, in the S&P500. Note that asset manager P/Es are highly cyclical, and need to exclude one-time special items.
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Blackstone Group8.74
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KKR & Co.6.96
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Fortress Investment Group5.89
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Apollo Global Management8.93
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S&P 500 PE Ratio25
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3: It is standard to estimate costs as a portion of AUM, since they are sticky regardless of fund performance, but here, fees are based on AUM anyway and it might be more intuitive for someone without a finance background. That is, imagining how much a company pockets after revenues is easier to conceptualize than how much it costs to run a fund. If costs are over revenues, there are no earnings anyway.
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Note: Not taking the 'Open Fund Platform' earnings into consideration
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AUM = Assets Under Management
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Simplifying assumptions in PERFORMANCE returns calculations, since there is no information provided. Returns are usually lumpy in the industry - high in good markets, low in bad markets.
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