The initial valuation of DirtiCoin is determined by several factors. DirtiCoinMinting (the Company, DCM, or we) set the DirtiCoin Coin Cap as well as the initial DirtiCoin release (minting) based on a careful market analysis. We looked at several factors. Subsequently, we continue monitoring these factors because they affect our ability to carry out our mission.
- What is the current demand around the world for protecting wealth from inflation?
- What is the current demand around the world for protecting wealth from volatility?
- The current market size of cryptocurrencies such as Bitcoin (BTC) and Ether (ETH) and how much has been lost recently
- How much capital can we invest in US real estate in a given period of time without taking excessive risks?
- What is a reasonable price point to enable many people to store their wealth in DirtiCoin?
Inflation Woes
In June of 2022 inflation in the USA broke a 40-year record going above 8%. According the Pew Research Center in 37 of 44 countries average annual inflation in 1Q2022 was more than double what it was in 1Q2021. Israel, Greece, Italy, Spain, and Portugal have all seen inflation go up more than 10x of what it was a year ago. In the USA it has increased more than 400% from two years ago.
Inflation rates like this haven’t been seen in decades in most of these countries. The short-term and long-term economic devastation inflation is wreaking on individual wealth will probably be largely ignored in the news.
Good Valuation – Inflation Hurts
The damage can be expressed in simple terms. If inflation is at 8% you have to subtract 8% from your investment returns to figure out how much you wealth is growing, or shrinking. Given the accompanying volatility we are seeing below, the losses for most people are huge.
The last time the US saw a comparable situation was during the 1970s when lending interest rates soared above 20%. The World Bank Group’s June 2022 Global Economic Prospects predict that inflation will be a serious problem for several years. Bear in mind that government economists often promote the view that a certain amount of inflation is necessary, healthy, or unavoidable. So, if they are saying it is a problem, it is a much bigger problem for most people than the experts say.
For you, even a 2% rate of inflation means that every year you are losing 2% of your buying power. That may not be considered a problem by the experts, but it is eating your wealth.
For more on how DirtiCoin helps protect your wealth from inflation click here.
Volatility Wars
In June of 2022 The Washington Post noted that the Dow Jones Industrial Average (DJIA) has dropped nearly 18% in the six months since January of this year. Meanwhile, the Standard and Poor’s 500 index has shed nearly 23% of its value during the same period. The NASDAQ has lost 31%. These drops in stocks represent massive losses for the nest eggs of many people. Tack on an 8% inflation rate and the real impact to your wealth may range from a loss of 26% to 39%. The Washington Post doesn’t think this downturn will end soon. With $8 trillion in losses already, they conclude that “the only questions that remain are the length and depth of the current contraction.”
While some few investors have made money from these downturns, most people have suffered losses in a few months that will take years to recover.
The Crypto Market
In early November of 2021 the crypto market was estimated to be worth about $3 trillion. Since then, the crypto market has shrunk rapidly. Therefore, in June Finbold.com valued the market at less than $1 trillion.
BitCoin has declined from a high of about $60k per coin to nearly $20k. currently is worth about $1.03 trillion USD.
Good Valuation – Running for Safety
For most people wanting to flee volatile investments the traditional answer has been bonds. Unfortunately bond returns have fall far behind inflation as well. This leaves cautious investors shifting their wealth into cash.
If DirtiCoin had been available in November of 2021, capturing just 5% of the crypto run off would have resulted in a market cap of more than $100 billion. It is highly probable that 5% or more of them would have taken advantage of that hedge.
For more on how DirtiCoin protects your wealth from volatility click here.
Initial Valuation
Volatility and inflation are adversely affecting both traditional and crypto investments. At the same time soaring inflation is adversely affecting fiat currencies. This appears to be a perfect storm for the launch of DirtiCoin.
The initial planned minting of DirtiCoin is for 15 million DirtiDollars (DiD). With each DiD valued at about $100 USD an initial market cap of $1.5 billion USD seems very conservative.
Good Valuation – Exchange Rates
We base the exact exchange rates for USD, BTC, and ETH for DiD on the 30-day moving average of the value of each currency immediately prior to the launch. Because these values change, therefore over time the exchange rates will change too. The ratio of DiD in circulation to the value of the Asset Ledger will always be the key determinant of DiD value. The exchange rates we will honor will be posted in the Asset Ledger and updated each month.
The first table (below) shows the price relationship between DirtiCoin and ETH. The second table (below) shows the price relationship between DirtiCoin and BTC. The “Target” value reflects the value of DirtiCoin used in the projections associated with this publication, rounded down to the nearest whole dollar.
The “Low” and “High” estimates reflect the probable range of valuation which will occur as DirtiCoin is launched.
ETH v DirtiCoin
Table 2 Initial ETH v DirtiCoin Valuations
| Initial ETH v DirtiCoin Valuations | |||
| Ether Value | $ 1,160 | ||
| Ether to DirtiCoin Exchange Rate | 8.90% | ||
| DirtiCoin USD Value per DiD | $ 103.27 | ||
| DirtiCoin for 1 Ether | 11.233 | ||
| ETH Ranges | DirtiCoin Value | Dirt to ETH Ratio | |
| High | 125% | $ 129.09 | 8.99 |
| Target | 100% | $ 103.27 | 11.23 |
| Low | 75% | $ 77.45 | 14.97 |
BTC v DirtiCoin
Table 3 Initial BTC v DirtiCoin Valuations
| Initial BTC v DirtiCoin Valuations | |||
| BTC Value | $ 20,253.00 | ||
| BTC Exchange Rate | 0.51% | ||
| DirtiCoin USD Value per DiD | $ 103.27 | ||
| DirtiCoin for 1 BTC | 196.12 | ||
| BTC Ranges | DirtiCoin Value | DirtiCoin to BTC Ratio | |
| High | 125% | $ 129.09 | 156.90 |
| Target | 100% | $ 103.27 | 196.12 |
| Low | 75% | $ 77.45 | 261.49 |
Good Valuation – Subsequent Valuations
The growth of DirtiCoin will result in additional releases up to the Coin Cap. With every release, the value of one DiD is driven by the value of the asset ledger. We will manage the timing and size of the releases to protect and grow your wealth. If necessary, we will ask you, the DirtiCoin holders (the DirtiCoinDAO), for permission to increase the Coin Cap. Above all, with DirtiCoin, you have control over the growth of your wealth. This is better than trusting it to a central bank controlled by the government.
Conclusions
The value of a DiD is intended to always be a relatively low barrier to entry compared to the cost of real estate.
The same people who store their wealth in DirtiCoin are the only people who can increase our Coin Cap.
The initial market cap of DirtiCoin, as a haven from volatility and inflation, is reasonable and attainable.
