Bitcoin versus tesla, which is the best investment over a one a five and a ten year period. So bitcoin and tesla are my two largest positions and likewise they’re my two biggest conviction positions, I’m an enormous Elon Musk fanboy and likewise, I’m also an enormous bitcoiner as well so I’m kind of that annoying person who doesn’t shut up about either of these things.
So instead of annoying my friends and family, why not annoy you guys and tell you what gets me so excited. So first, we’re going to go through a shorter term time period. My estimates of which is going to perform better over the short term and then I’m going to bring you through a spreadsheet. I’ve made of the likely scenarios for tesla and for bitcoin and which is likely to outperform over a longer term time period. So stick around for that because that’s kind of an interesting way I’ve done that.
But I know this is more of a stock market channel and usually whenever I bring out a bitcoin video it gets less views. But I really think a lot of people are interested in the stock market should really consider investing or at least looking into bitcoin more. I think it has enormous potential over the next few years so that’s why I want to kind of be the bridge between the crypto community and the stock market community.
It is because there’s people who are either fully in the stock market or fully in crypto. However both are great places to park your money and potentially make a fortune over the next decade or so. Okay so anyway let’s get cracking straight into this article with which do I think is going to perform better over the short term.
Well, if we look at tesla’s performance recently, we can see tesla recently basically 10xed. So in the last year, it went from around 180 dollars pre-split to now it’s like 2200 post split. So yeah, divide those two by five if you’re looking at a shorter time period. I think it’s unlikely that tesla’s gonna 10x again.
So within the next three years, I can’t imagine tesla’s going to 10x again. I think it’s going to take some time for tesla the stock price to catch up with its current valuation just in regards to the amount of revenue they’re making. The amount of cars they’re selling etc…we can see the last time tesla went from like 30 to 300 pre-split. Again they kind of hovered around that for a few years before.
They then 10x again, so just if we’re looking at we’re kind of looking at it from a technical aspect here. But looking at it from a technical aspect, tesla kind of goes flat for a long time and then out of nowhere shoots up. So that’s what I expect or something like a gradual increase for a number of years and then tesla up to the moon. But in the short term, I don’t really see that happening. But i think once tesla releases their robo taxi network or it goes live or their model 2 comes out. The sales are great once some sort of catalyst like that consent has the stock price jumping.
But I think that’s going to take a couple of years before that happens. However, personally I think bitcoin is on the precipice of another 10x or enormous price increase if we’re looking at it from a technical aspect. As well we can see that bitcoin kind of goes in these four year cycles which aligns with its halving event. It essentially cuts the new fresh supply of bitcoin in half every four years and that reduces the supply so the supply is reduced.
If the demand remains constant, eventually that demand has to push the price up so historically after the having. About one to two years after having is when bitcoin has gone into these extreme bubble phases and we’re about six months after the last halving. Which happened in may well six seven months after that last having so over the next year a lot of people are expecting bitcoin to go into one of those parabolic bubble phases. So there’s a high likelihood that that could happen and the risks are limited in my opinion.
So personally I think bitcoin is from a risk to reward standpoint and for if you’re looking at a one to two year time horizon. I think bitcoin is the best investment right now out of any stock assets. Anything personally some people believe that these cycles that bitcoin goes through are lengthening so they’re getting longer because the first one was like three years then the next one was four years. Some people think that that’s gonna be five or six years.
However, personally, if i don’t agree with that, I think the four year is more likely the four year cycle and that’s because if these cycles were lengthening. If we assume that these cycles occur because of the halving event which cuts the supply in half, then we’d also have to if that’s the case.
If that’s the cause of these cycles, then if the cycles were lengthening then past half halving cycles they would start interfering with each other and basically the cycles would break down in a in a couple of cycles because previous halvings start to mess with the current cycles. Anyway we’re getting a little bit off track here but personally I think the likely next peak will actually be this time. Well maybe not this time next year but probably December time next year or early 2022.
So I’m at the moment, I’m like 50 and my tesla position and 50 bitcoin position obviously of other positions but they’re about equal in the amount that I have of each in dollar value. However for the last month and for the next few months I’m going to be putting.
I’m not going to be putting any more money in tesla or probably very much in any other stocks maybe a little bit but most of my money for the next couple of months is going to be going into bitcoin and some other cryptocurrencies that I might talk about next, but I’ll let you know here uh.
Chain link and Ethereum that’s where all my money is going to go for the next few months. Because i think they have the best risk or reward right now. So if everything plays out like I wanted to and bitcoin and those other cryptocurrencies do very well in the next year or two, then i’ll be selling them and putting that those profits into tesla stock. So then when tesla stock shoots up my only problem will be to choose the colour of my next lambo.
Comparison between Bitcoin and Tesla
All right so let’s dive into my computer and do a comparison between bitcoin and tesla on a longer term time horizon. I’m gonna have to explain you how I’ve set this up and it’s a bit of a different weird way it’s not like a discounted cash flow method or anything like that. It’s a very crude way that i’m going to value what tesla and bitcoin are worth considering if they could go to whatever prices in the future.
All right, so how this essentially works is this valuation model that I’ve completely pulled out my arse, um so imagine we’re playing a game or i offer you this game right so one in a hundred times you play this game. I’m gonna give you a hundred dollars so how much would you pay for if you could play that game infinite times. How much would you pay to play that game so if you’re going to win 100.
100 times the absolute even the break-even amount that you would pay for that game is one dollar because 100 times you’re going to win 100. So you’re going to break even if you pay one dollar for that. So that’s kind of what we’re looking at here. Basically we’re saying that what is the market cap of tesla or what is the market cap of bitcoin in the future what is and what is the chance of that market cap in the future.
That’s where we’re getting these price targets from so first first of all we’re going to look at the market caps now so their market cap for tesla is 400 billion marketcap for bitcoin 280 billion. First we’ll just compare their chance of going to zero now. I can completely pull these chances you can change these chances to whatever you think is likely.
But personally, I think there is chance of tesla going to zero, so we’re gonna go the chance of bankruptcy. We’re gonna go bear, bull and then the golden goose scenario for both of these for tesla and bitcoin. So the chance of bankers bankruptcy for tesla in my eyes over the next decade or so is 10. It could happen another competitor could come along and outperform tesla or I don’t know.
I think it’s a very low likelihood so that’s why i’ve given a low percentage. 10 percent is pretty low consider all things. Considered the chance of bitcoin going to zero as well i also think is quite low so you can change that to whatever you think. But from studying bitcoin a lot and knowing a lot about bitcoin i think the chances of it going to complete zero are very, very small. Surprisingly small because i think there will always be a market for bitcoin even if the price can go a lot, lot smaller than it is now.
All right, so the bear case for 10 years, I’ve put tesla at a 200 billion dollar market cap. So about a 50 drop from where it is today. I’ve given that a 15 likelihood so I think tesla to have a smaller market cap than it does today in 10 years is quite unlikely as well. But probably a little bit more likely than it going to zero. So bitcoin is currently 15 000 or they’re about 14 15 000 and I think in a better case scenario like bitcoin could go a lot lower like if governments banned it.
If a lot of things go wrong where it’s not going to drop just 50, so I’ve dropped it by what’s that like seven percent of its current value. So i can drop like 93 or so in my opinion. The bear case is a lot riskier for bitcoin. But I’ve also given that 15 chance so looking at this, yeah in the chance of going to zero they’re about equal but in a chance of losing like 90 percent of your value, I think bitcoin’s definitely the more likely candidate to do that rather than tesla.
I hope that makes sense so that gives that one thousand dollars gives bitcoins market cap at 15 billion and the barricades for tesla is 200 billion right. So let’s move on to the bold cases this where things get a little bit more fun so the ball case for tesla I’ve put it at five. This is these are in trillions now so the ball case for tesla for its market cap is five trillion dollars.
So that’s if they sell 10 percent of cars worldwide they have their robo taxi network going if they have energy deployments selling solar roof. All that, all that jazz that I’ve run through in all my videos and that could a lot of people think they’ll be able to have one to two trillion dollars in revenue and with a price to sales ratio of like two, three, four, & five we can give them a market cap of five trillion dollars.
So that’s a high market cap obviously. That’s what more than twice what apple is now. But in ten years, yeah I think this is very good. I think tesla has a good opportunity to become the biggest company in the world. So I’ve given this a 50 likelihood or percentage or whatever. So like in that game, we’re going to multiply the total market cap or what you could win by the chance of that happening. 50 by five gives you 2.5 trillion so that’s the absolute value in today’s money or whatever.
I hope that kind of makes sense. I know it’s a bit of a weird way to do it now for bitcoin. I think this has a higher ball case in trillions in market cap wise and so that’s why it’s at 10 trillion and that’s what goals market cap is. I think bitcoin has a good chance of replacing or kind of not replacing gold obviously but kind of being in tandem with gold or having a similar market cap in 10 years to gold.
Because it’s a superior form for superior store value and a superior kind of digital gold so I’ve also given that a 50 chance now. Obviously you have to change your own numbers, put your own percentage chances because I know a lot of people especially in a stock market channel don’t think the chance of bitcoin going to 10 trillion dollars is 50 but I’m yeah, I’m obviously completely
biased and have my might have my head in the clouds. But I don’t care, that’s what I believe.
So 10 trillion dollars 50 chance and that gives us a present-day value of five trillion dollars. So bitcoin win wins here as well now the golden goose, what you’ve all been waiting for the golden goose scenario.
If the absolute best for both of these for both of these assets slash, yeah stocks slash bitcoin whatever. So the bitcoin-the golden goose scenario, yeah everything’s in trillions again. The golden glue scenario for tesla is if everything goes, if they sell most of the cars worldwide, if the model 3 or the model 2 that’s coming out in a few years. If that becomes the iphone of today. Just one of the best selling products of all time. The robo taxi makes them a fortune. They have everyone wants to get a solar roof a tesla roof etc.
Everything working out well for them. Everyone uses tesla trucks to transport goods etc. Golden goose scenario unseen like this isn’t completely impossible. Like tesla could be earning a few trillion dollars in revenue by 2030, so this is by 2030 at the moment they’re making nowhere near that kind of money. But in 10 years they could be making trillions and trillions.
If we use a price to sales ratio that’s similar to like amazon today which is like four or five. Then we can have a look, we can see this 20 trillion dollar market cap. I think the chances of this are pretty low. So 15 chance probably a little bit high on the percentage chance.
But who knows, but anyway this would give us 20 trillion dollars with a 15 chance of happening gives us three trillion dollars of that absolute value today. Now for bitcoin, the golden goose scenario for
bitcoin is enormous because basically everything entire value of everything on earth could eventually become valued in bitcoin rather than dollars. Everything could be become backed by bitcoin and the value of all money right now and stocks and everything is currently like 100 trillion. It’s actually a lot more but just for simplicity’s sake we’re gonna put it on a hundred trillion now. Obviously I don’t think there’s a high likelihood that bitcoin becomes a global reserve world currency. Some people think that’s a high likelihood but if that were to happen, bitcoin’s value would have to become that of everything in the world if you know what I mean.
Everything has to be valued in bitcoin then bitcoin’s value would have to be is essentially everything you know. So that would put bitcoin at 100 trillion dollars and yeah, I originally had this at a one percent chance it’s something like a one percent or two percent chance of happening in my eyes.
I think it’s extraordinarily low but if you have these sort of opportunities and you always skip them out throughout your life, you never take a swing at these games that have enormous upside. But not a high chance of happening. This are games that you should play so for example in that game save a one in 100 chance in that same game a one in 100 chance of winning a thousand dollars.
You have to pay one dollar to play. You should play that if you can only play it once. You should still play that because there is one on 100 chance, yeah you’re probably going to lose your dollar but there’s a one in 100 chance you’re going to win a thousand dollars so that’s kind of what I’m looking at with bitcoin right now. If you always pass up on those opportunities that are stacked in your favour yeah most of the time you’ll lose if you do that. But that one time that you do win, it’ll make up for all those ones that you didn’t miss so anyway. 100 trillion dollars very low, probability two percent and that gives it two trillion today. If we add all these up, that would be 5 trillion plus 2 trillion, 2.5 trillion plus 3 trillion we can see that tesla is winning on the ball and golden goose scenarios. However you also have to take into account that the chances of losing a large proportion of your money is higher with bitcoin for me. Both of them are amazing investments so I’m gonna on the next few years be still investing a lot of my money into both tesla and bitcoin.
Because I think they’re both enormous opportunities and yeah, my two biggest positions and probably will be my two biggest positions for a long time into the foreseeable future. So that’s all for this video. If you did enjoy this article, let me know by leaving a like so I know if these articles are helpful and you’re enjoying them. I really hope you enjoy it. I really hope you learned something. Thanks and goodbye.