Introduction

Allow me to introduce Daddy Coin, a cryptocurrency launched by the Tate brothers, Andrew and Tristan Tate. Daddy Coin was launched on the 28th of June 2024, making it nearly six months old. With the initial excitement waning, now could be an ideal time to invest. Currently, its market capitalisation is only $36 million, down from over $122 million just a few months ago. The coin remains relatively liquid, with an average daily trading volume of $1.3 million.

Why is Daddy Coin a Promising Speculative Bet?

My thesis for Daddy Coin is simple: this is a speculative bet. Unlike my stock investments, where I focus on profits and dividends, my goal here is to sell Daddy Coin to another speculator at a higher price in the future.

Let's start with the fundamentals and address the elephant in the room—cryptocurrencies, in my opinion, have no intrinsic value. Daddy Coin is no different. It doesn't generate cash flows, and it never will. However, that doesn't mean it can't appreciate in value.

I believe there will come a time when Daddy Coin gains momentum and starts trending upwards. In the crypto market, momentum can become self-reinforcing, driven by two powerful forces: greed and the fear of missing out (FOMO). Many young investors have already made significant profits in cryptocurrencies and are eager to replicate their success. This nostalgia for past gains fuels demand, and Daddy Coin is positioned as an extension of an already thriving trend.

A major factor in Daddy Coin's appeal is its strong branding and association with Andrew Tate. The name is catchy, and Tate's influence is only growing. His brand commands an enormous following—over 200,000 paid subscribers to his educational platform University.com and more than 11 million followers on X. His audience consists of young, ambitious individuals eager to capitalise on the next big opportunity. With this built-in base of potential investors, liquidity and interest in Daddy Coin are likely to surge.

Moreover, Andrew and Tristan Tate are master marketers. Their ability to capture attention and provoke discussion ensures that Daddy Coin will remain in the limelight. If anyone can create hype and drive demand, it's them.

Andrew Tate has even stated that Daddy Coin will reach a $1 billion market cap—a bold claim, but one that suggests confidence in its potential. Even if the coin only reaches a third of that target ($360 million), it would still represent a tenfold increase from its current market capitalisation. Additionally, Tate's reputation is on the line. Letting Daddy Coin fail would damage his credibility and could impact his other ventures. To prevent this, the Tates may even inject their own capital to spark a price surge.

In summary, while Daddy Coin is undoubtedly a speculative play, its branding, association with a high-profile figure, and a strong, eager fanbase create a compelling case for its potential to appreciate significantly in value.

Timing – When Will the Coin Surge Upwards?

Predicting the exact moment Daddy Coin will gain momentum is difficult, but several potential catalysts could trigger a surge in value.

One key factor is the legal situation of the Tate brothers. If they are fully cleared of all charges and regain the ability to travel, they have vowed to promote Daddy Coin on a worldwide tour. This could generate an initial wave of interest, sparking a self-reinforcing cycle where greed and FOMO drive the price higher. Legally, the first indictment against them has largely been dismissed, and the second appears to hold little weight. I don't expect Andrew and Tristan Tate to face imprisonment based on the available case files. However, given the notoriously slow court process, it may take some time before they can travel freely, delaying their ability to tour in support of Daddy Coin.

That said, the Tates don't necessarily need to travel for effective promotion. Andrew Tate remains one of the most searched individuals on Google, and together their influence extends across platforms like Rumble and X. Despite media opposition, the rise of free speech platforms has ensured their reach remains strong, allowing them to drive interest in Daddy Coin purely through their online presence.

Another potential catalyst is the possibility of the Tates injecting their own capital into Daddy Coin. With their substantial financial resources and their track record of bold financial moves, they could strategically stimulate the coin's value, creating the initial momentum needed for a significant price surge.

In summary, while the exact timing remains uncertain, a combination of legal resolution, strategic marketing, and potential capital injection could set the stage for Daddy Coin's upward trajectory.

Under What Conditions Are Cryptocurrencies Likely to Rise?

Several factors could drive the next major surge in cryptocurrency values, and Daddy Coin would likely rise along with the broader market.

One key driver is government monetary policy. If governments continue reckless money printing through quantitative easing, inflationary concerns will push more investors toward alternative stores of value, including cryptocurrencies. The demand for decentralised assets tends to rise when fiat currencies are being debased.

Another major factor is the growing adoption of cryptocurrencies for payments. If crypto gains broader acceptance and becomes more widely used in everyday transactions, its utility and mainstream legitimacy will strengthen. This could drive increased demand and, in turn, higher valuations for digital assets.

Additionally, geopolitical trends could play a crucial role. Some analysts suggest that BRICS nations are encouraging cryptocurrency adoption as a means to reduce reliance on the US dollar, which remains the world's dominant reserve currency. Many countries are eager to weaken America's economic influence, particularly as the dollar's reserve status underpins global sanctions.

BRICS itself is evolving into a more powerful alliance, with rapid economic growth and an expanding membership base. If this bloc continues to challenge traditional financial structures and actively promotes cryptocurrencies, the entire market could benefit—including Daddy Coin, which would likely rise alongside other digital assets in response to these macroeconomic shifts.

In summary, inflationary monetary policies, broader crypto adoption, and geopolitical shifts favouring decentralised assets could all serve as catalysts for a significant rise in cryptocurrency values.

Circle of Competence

My extensive knowledge of Andrew and Tristan Tate places them firmly within my circle of competence. Having watched hundreds of hours of interviews, I have developed a deep understanding of their personas and values. I believe they will continue to stay relevant and grow in popularity over time. Since this coin is a representation of their brand, I anticipate its value will increase accordingly.

Historical Price Comparison

Currently, the coin has a market cap of $36 million and is priced at $0.06, marking its lowest point to date. While momentum is currently against us, the coin has previously traded at much higher levels. This history suggests that if market sentiment returns to previous highs, the coin could potentially reach those past price levels again.

Risks

Momentum and Systemic Risks

Many cryptocurrencies have failed and lost all value, and Daddy Coin could face a similar fate. While the crypto market thrives on momentum, that momentum can shift both ways—just as rapid surges can drive prices up, sharp declines can just as easily drag them down.

If the broader cryptocurrency market crashes, Daddy Coin is likely to follow suit, as all these assets rest on the same fundamental criticism of fiat currencies: the distrust created by consistent and uncontrolled money printing.

While scepticism towards fiat currency is not unfounded, cryptocurrencies themselves lack any tangible backing. Unlike gold—which is rare, has practical applications, and has served as a reliable store of value for thousands of years—digital currencies are new inventions, exist purely as tradeable assets and are without inherent worth. While Bitcoin's supply is capped, the wider cryptocurrency market has no such limitation, with new coins emerging constantly. This unchecked expansion raises questions about the long-term sustainability of the market.

Moreover, cryptocurrencies do not benefit from governmental backing or legal enforcement, making them arguably even riskier than fiat currencies. Their decentralised nature also challenges governmental authority, and their association with illicit activities has contributed to debates about their impact on societal values. Without regulation or a solid foundation beyond speculation, Daddy Coin remains highly vulnerable to market sentiment and external pressures.

Rug Pull

The risk of a "rug pull" exists. The Tate brothers have made substantial investments in this coin and other cryptocurrencies, indicating aligned economic and financial interests. Given their high level of scrutiny by law enforcement, they are unlikely to engage in dubious practices such as "pumping and dumping." While I view this as an unlikely risk, it remains a possibility.

Lack of Intrinsic Value

There is a possibility that my investment in this coin is overly optimistic, as it lacks tangible assets or fundamental value to support its valuation. I may also be getting caught up in the speculative hype.

Psychological Biases

I may be falling for the “halo effect”, a psychological bias where I believe the coin is worth more than it is because I like Andrew Tate.

Court Cases: Assessing the Risks and Political Landscape

The legal battles surrounding the Tate brothers remain a key consideration, but the worst may already be behind them.

The first indictment has been effectively dismissed, and while the second indictment could take years to resolve, its impact on their ability to promote Daddy Coin may be limited. Additionally, both brothers face extradition cases in the UK related to sexual battery allegations dating back to 2011—cases that were previously dismissed. Given this history, there may be little substance to these charges.

Political opposition also plays a role. The UK government, particularly under a Labour administration, appears intent on curbing Andrew Tate's influence. His political ambitions, including his bid for the presidency with the newly formed Bruv Party, could attract further attacks. However, a shifting political landscape may work in his favour.

From a financial standpoint, the tax charges they face are civil rather than criminal. Any financial penalties are unlikely to be substantial enough to significantly affect their business empire or their ability to sustain Daddy Coin's momentum.

While new allegations could arise, history suggests these controversies have only amplified Andrew Tate's fame and influence rather than diminished them. The scandals have reinforced his brand and drawn even more attention to his ventures.

Looking ahead, the return of Trump to the US presidency is unlikely to support covert efforts against the Tates. If these cases are politically motivated, as some believe, a changing political climate could reduce such pressures.

That said, risks still exist. There is always the possibility of unexpected developments, including further legal action, incarceration, or even extreme scenarios like assassination or suspicious circumstances leading to their deaths. Any of these would severely hinder their marketing efforts and negatively impact Daddy Coin's prospects.

In summary, while legal and political challenges persist, many of the most significant threats appear to be waning. If the Tates can navigate these remaining hurdles, their influence—and by extension, Daddy Coin—could continue to grow.

Scenario Analysis

In this section, I present future projections and determine a weighted average valuation for the coin, using a three-year timeline and applying a 5% discount rate to reflect the time value of money.

• Crashes to zero - 25% probability = $0m
• Stays the same - 15% probability = $36m * 0.15 = $5.4m
• 2X growth - 25% probability = $72m * 0.25 = $18m
• 5X growth - 10% probability = $180m * 0.10 = $18m
• 10X growth - 10% probability = $360m * 0.10 = $36m
• 20X+ growth - 15% probability = $720m * 0.15 = $108m

Total Estimated Value = $185.4m

Discounted to Present Value (PV) = $185.4 / 1.05³ = $160m

Key Points:

• Valuation Conclusion: With a weighted average valuation of $160m, the coin appears undervalued and should be a strategic addition to a diversified portfolio.
• High Upside Potential: The highest potential upside is given a greater probability due to the tendency of cryptocurrencies to surge dramatically once they gain momentum.
• Portfolio Positioning: Given its speculative nature, this investment should only constitute a small portion of a portfolio, perhaps around 2%. It provides diversification from traditional assets like stocks and bonds and offers significant growth potential.
• Risk Acknowledgment: This investment should only be considered by those who can afford to lose the money, as there is a high likelihood of the coin losing all value.
• Timing the Exit: Identifying the optimal time to sell is challenging due to the speculative nature of the investment, unlike traditional investments where intrinsic value comparisons guide decision-making.

Conclusion:

As the weighted average value is far higher than the current market capitalisation, I conclude that this is a sensible and attractive addition to a portfolio. However, as this proposed investment diverges from traditional value investing principles, which emphasises fundamental analysis and intrinsic value I have kept the position small to control for risk and allow for growth without necessitating premature trimming.

A larger initial position could hinder the potential for substantial returns due to the psychological and portfolio management biases that might lead to early selling. By starting with a smaller allocation, there is room for the investment to grow significantly, potentially becoming a major contributor to the portfolio's overall value without overshadowing other holdings.

Disclaimer - This coin isn't available on traditional platforms and cannot be included in an ISA or SIPP. However, it can be part of a regular portfolio, and you can use your annual allowances to offset any gains.

This is not investment advice – please do your own due diligence.