Brief Weekly Update Report #1
The purpose of these weekly updates is to give you a snapshot of where the fund is sitting both in terms of market, fundamental (or intrinsic) and liquid values. Normally they will be very brief with little to no discussion at all, however, being that this is the first we thought it best to have some discussion to make the figures easy to understand going forward.
Too Long, Didn’t Read- Overview
The fund has hit the ground running for it’s first week and a bit and has seen unexpectedly high return, especially considering we haven’t had the arbing active for the whole period. Keeping in mind this report covers about ten days, not just a week, we saw a fantastic result of liquid growth of just over 7.5%. To put that into perspective, if we can maintain this rate of growth (not suggesting we will, there are always some statistically unusual weeks in a year) we would see more than 1,100% growth over a 12 month period!
The market has been reacting accordingly with this confidence and we are seeing most investors keen to retain their holding, knowing that the larger exchanges, coupled with the ongoing high performance of the fund should see the tokens move ever closer to their intrinsic value over time. This lack of supply has caused the CHT to have a weighted average market value of 0.0075ETH.
Intrinsically this is still a bargain investment, so we expect that we will see a BUY or HOLD from most investors at this point. Of course different investors have different strategies and so this may require them to liquidate some of their holding and I am sure that there will be someone there to snap it up, especially when we launch on a larger exchange (We will announce a very exciting exchange listing with one of the first exchanges to be properly licenced to sell securities, this will be huge and we will let you know more once we have permission to do so from the exchange. You will also see joint PR announcements around this in the crypto and finance media).
CHT Weighted Market Value is (at the time of preparing this report): 0.007508197ETH or $3.74USD
This, for many investors, is the only figure that matters. This tells you what CHT is selling for on the open market and will give you a good approximation of how much you could liquidate your holding for. With this figure we use a weighted average value to prevent someone or a group of people from manipulating the price by selling 1CHT or a very small amount of CHT for a crazy price (either High or low). It should be added that at this point in time there are only a few small exchanges selling our token (Zapple, EthaDelta, TokenJar and Token.Store), we are soon to be listed on one of the first major exchanges to be properly licenced to sell security tokens! We will be releasing all the details about this the moment we have permission from the exchange to do so. We think this should show even more market value growth as for the first few months from listing we will be a part of a very large marketing campaign by the exchange as well as using broker houses to actively sell CHT to their investors, thus creating a larger demand, whereas the supply will remain relatively small. This is good news for our ICO investors as they are going to see some strong growth in market value in the following few months.
Fundamental or Intrinsic Value
Fundamental value (sometimes referred to as intrinsic value) is a calculation to determine the actual value of a share, unit or in this case a token when looked at as an investment. So this is not the same as liquid value, which we will get into in the next section.
There are many ways to calculate this value, we have chosen the Jae Jun Intrinsic Value Formula. The main reason we like the Jae Jun is because it is one of the most conservative calculations there is. Now we have kept to how this is traditionally used and that is to base it on a 10 year return, factoring in the yield reducing over time. We have also taken an extra step to be even more conservative on this calculation; Jae Jun reduced the ‘no growth PE ratio’ from 8.5 to 7 but due to the increased volatility in the crypto market we think it is more prudent to reduce this value all the way to 1 (this value operates as a multiplier in the calculation so reducing it to one is very significant in the results the formula we return)
Intrinsic or Fundamental Value (V) of CHT: 3.55ETH or $1,764.01USD
Intrinsic value is represented as a ‘V’:
Liquid Value and Fund Growth
Liquid Value is the value of the assets the fund holds divided by the number of tokens in circulation. This is effected by many things, including, the averaging down of ETH to USD over the crowd-sale, costs of listing on exchanges, the performance of the fund and bonuses and bounties etc.
Fortunately, we have had three things work really well in our favour for the liquid value of our tokens:
The fund has had a very high performing week (and a bit) of just over 7.5%, this is a great result and was a product of the dropping and then raising values on crypto. Especially noticeable is most of this growth happened without us having our arbing active (only been active for the last day and our new strategy has so far proven to work well, but we are still playing is relatively safe to avoid it being evaporated too fast).
Our averaging down the ETH to USD to protect it from fluctuations over the Crowd-sale has proven to be very prudent, especially for those who invested in the public sale.
Exchanges have been coming to us, asking us to list. This come as a big surprise to some people who have been in the crypto space a lot longer than us, we thought it must be normal practice. Now, most times we run into the issue of us being a security, but there are a very small number of larger exchanges that are getting licenced to sell securities (one would think this may give them quite the edge in investor’s eyes and attract the big capital to their exchanges). What has been good about being invited as opposed to requesting a listing is that it has put us in a good position when it comes to negotiating the costs and terms of listing. This has meant they we have come to an excellent agreement with an exchange (soon to be announced) that works well for both Countinghouse and the exchange.
The current liquid value of CHT tokens with all the above mentioned factored in is: 0.00115ETH or $0.57USD
It has been a great start for the new crypto fund and positive responses from both investors and the market has really been encouraging. It’s a good time to be a CHT investor and there is so much room for growth in this investment moving forward.
If you haven’t yet invested in CHT it is still intrinsically cheap and it’s likely to increase once we are on the larger exchange, so there’s still opportunities for new investors.
For current investors, we have seen some pleasing results, we are looking forward to you joining us for the future growth in both market and the liquid fund!
Thank you to all our investors, as always you can contact us on Telegram (link at the bottom of the screen) or by email: Contact@countinghousefund.com