One of the most wild valuation models for cryptocurrencies is the Store-of-Value thesis. I do believe that this model could be applied in various scenarios and applications. However, whoever presented this “as is” to be applied to Bitcoin is ludicrous.

The thesis is, in essence, a theory in itself. Of course, the conceptual line of thinking for coming up with a store of value valuation for digital assets makes sense. It makes sense that monetary scholars and investment analysts would want to formulate an equation to present “store of value” valuations for institutions and investors of digital assets.

The “as is” store-of-value thesis methodology indicates how a digital asset’s value is a function of its ability to act as a store of monetary value for its users and investors. Based on this theory, a digital asset becomes a store of value if it is immune to theft, have realistically low inflation, and a low cost of conversion.

Store of Value (SOV) Thesis

Potential Total Store of Value / Number of Tokens Outstanding = Potential Price per Token

The above equation is rather straightforward; and even makes sense.

The problem with this logic is in the variable inputs. It is overly simplistic and flawed. Let me explain my reasoning and my line of thinking.

Many Bitcoin pioneers, from Nick Szabo, Hal Finney, Andreas Antonopoulos, Paul Tudor Jones and MicroStrategy's Michael Saylor have all compared Bitcoin to gold in some context of debate. These narratives are what has helped shape the Store-of-Value (SOV) Thesis methodology as well as the sales pitch of Bitcoin being a store of value like gold.

The flawed logic stems from the “potential total store of value” required input. It is an equation, therefore, you “could” input any variable that meets your criteria for your digital assets potential store of value. However, as applied to the cryptocurrency space, more specifically applied to Bitcoin, investors and analysts input the total global market cap of Gold to reach their Bitcoin valuation.

This makes zero sense as a useful valuation. If I used this valuation, on the presented form, for any asset class, let alone an emerging asset class, I most likely would have set my potential investment return as unrealistic.

Might I add, that even if BTC hits or exceeds the market cap of gold, it has no correlation to the actual Store of Value of gold or its market cap.

To me this seems like a well funded sales pitch formulated by institutions to sucker financial institutions and retail investors into buying a “store of value” asset. To me it is specious; having a false look of truth or genuineness, misleadingly attractive. It would make more sense using this formula to find the potential store of value for an alternative smaller cap token, ie Ethereum, and inputting the potential store of value variable as the Bitcoin’s current market cap. This way you are least comparing apples to apples, oranges to oranges.

With that said, my beliefs of the usefulness of the presented store of value thesis of certain digital assets doesn’t negate the fact that investors may want to attempt to find a digital assets USD$ valuation based on its store of value. But how can we make it relevant in terms of correlation and application.

I am going to present an example on how we could use the Store of Value (SOV) Thesis model in determining the USD$ valuation for iEthereum.

As mentioned above, if I were to apply the “as is” (SOV) equation to iEthereum and the gold market cap this would be unrealistic, therefore, why even attempt. We seek to publish useful relevance. We are going to present a much more realistic hybrid model.

Here we go!

Just like the Store of Value Thesis makes the assumption that Bitcoin has the potential store of value of gold, we will also make assumptions.

Our assumptions are as follows:

Lets equate the USD$ valuation of iEthereum using the Store of Value (SOV) Thesis model by substituting the total global gold market cap with the Apple device inventory of precious and industrial metals that are contained in each device.

Does this make sense?

IF iEthereum is an Apple open source project and we were to equate the USD$ value of iEthereum utilizing the Store of Value Thesis methodology by inputting the industrial and precious metals that are in each of the active Apple devices; ie iPhones, iMacs, iWatch, iPads, etc— we need to do some math.

According to the recent report filings; Apple currently has 2.2 billion devices worldwide.

Here's a table that organizes the precious or industrial metal that each Apple device contains, +- Amount of Metal in each device, +- Spot USD$ Price/Gram of the metal and the Total USD$ Cost of Metal multiplied by the 2.2 billion active Apple devices.

This table should provide a clear breakdown of each metal's contribution to the total cost, based on quantity per device, spot price, and total value per metal across all active Apple devices.

Lets get back to the math.

iEthereum Store of Value (SOV) Thesis

Potential Total Store of Value / Number of Tokens Outstanding = Potential Price per Token

Potential Total Store of Value = $9,322,126,998

Number of iEthereum tokens Outstanding = 18,000,000

Potential Price per iEthereum Token = $9,322,126,998 / 18,000,000

Utilizing the Store of Value (SOV) Thesis for iEthereum equates to $517.89 per iEthereum if we were to use the above assumptions.

Although these numbers wont change to frequently; we are excited about adding this valuation method into our Monthly, Quarterly and Annual iEthereum Digital Commodity Index Reports. Every monthly, quarterly and annual report we attempt to add one more useful data point to our already comprehensive report. This allows us to gradually build up the report to be more and more extensive over time. This monthly report we will be adding the Store of Value (SOV) Thesis to our valuation model section. Our October 2024 report will be published for paid members on November 4th.

Please note that regardless of outcome of the future, we can always modify the equation to fit current realities. For instance, do we include an additional 200 million devices that would include the production year of devices in addition to Apple’s active devices? How many years of inventory of metal does Apple already have procured for future production? Is iEthereum able to be correlated to Apple? All things to consider!

iEther Way, We See Value!