hyperbitcoinizationMarkets

Valuing Companies Post-Hyperbitcoinization

How will companies be valued once bitcoin is universally used as a unit of account and measuring stick of worth?Bitcoin will fundamentally change the way that investors value companies.Upgrading monetary technologies is a radical paradigm shift that will leave many financial “experts” confused. Our current monetary system, the U.S. dollar, is based entirely on an ever-growing mountain of debt. In contrast, the Bitcoin monetary system is equity-based, with no counterparty risk and no dilution risk.Once the world has completely embraced bitcoin as the superior monetary good, we will be living in a post-hyperbitcoinization world. Let’s experiment and see how a company will be valued using bitcoin as our unit of account or measuring stick of value.Wyoming Red RibeyesThe fictional company we will use for this example is Wyoming Red Ribeyes. It is a small cap, consumer staples, wholesale beef supplier that raises cattle and then sells premium beef to grocery stores in the U.S.We will analyze this company with a discounted cash flow (DCF) analysis. Put simply, we attempt to predict the future cash flows the business will generate, and discount those cash flows to today’s value.Two DCF models are created. One model is analyzing the company in a world where prices are driven by USD-denominated investors (today), and the other model is analyzing the company in a world where prices are driven by BTC-denominated investors (post-hyperbitcoinization).USD-Denominated Model (Pre-Hyperbitcoinization)Before we create the full model, we need to lay …
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