Yes, you heard right, Bitconnect X may have just saved BitConnect. Here's my quick analysis why:
Let's break this down. Anyone with some decent sense knows the current business model for BitConnect is unsustainable (~1% per day compound everyday). Taking all emotions out of it, the question from a business point of view is how much cash or coin does BitConnect have to survive paying the legacy interest of its user base.
Let’s dig deeper. There is a total supply of 28 million max supply of BCC. During it's ICO in Dec 2016, it released a total of 4.6M coin. Since then, they have released a total of 9.4M coin in the total supply. Their current burn rate (in corporate terms) is 4.8M coins per year, or $1.92B USD per year at an average price of $400 per coin for the last year. The max total supply of BCC coins is 18M coin.
At the current price of $400 per coin, they will have a total cash position of $7.2B USD if they can maintain the current price. In other words, if they maintain the same user base and burn rate, they will have about a little over 3.5 years at the current pace. Of course, compound interest is exponential, and if they can’t grow faster than they pay out, BCC price will drops significantly, and they will be knocked out faster than you know it.
Bitconnect X is their savior. From what it looks like, Bitconnect X will be a cryptocurrency exchange. Similar to Binance or Bitrrix, exchanges are very profitable and run on many difference revenue streams. Besides the trading fees and incubator ICO market, BitConnect X can run their own ICO on their new coin and bring in another $1B USD worth of cash into their system. Also, with Bitconnect current user database of 100M subscribers, their platform to transition to an exchange may bring them enough new revenue streams that they can transition out of the 1% daily model.
What are your thought?
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