Hello community, how would you go about estimating the # of cryptocurrency owners in a market sizing case? Love to hear your thoughts.
Estimating # of Cryptocurrency Owners (Market Sizing)
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Hello,
I think this is a market sizing where the top-down approach starting from population can work very well. In a nutshell:
- Divide population into different segments
- For each segment approximate the percentage of people that invest their money
- Assume per each segment the percentage that could be interested in such a modern asset (e.g. people between 50 and 60 years old are likely to invest but maybe not so interested in cryptocurrency)
- Multiply the previous data to obtain the volume of cryptocurrency
Additional thoughts to put on the table and discuss:
- People that have cryptocurrency without even knowing (banks or other investing entities handle their money)
- The number can vary a lot over the time (e.g. after news on cryptocurrency regulations)
You can also do a sanity check of the number comparing it with the total digitalized people of your country (if you have the data) and see if the percentage makes sense.
Best,
Luca
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Hi there,
Classic top-down :)
Break down the pop by age (or income) groups. Then estimate the % of each group that invests. Then, estimate the % of that group that would be likely to pick crypto.
Hint: % investing is directly (positively) correlated with age and income. The % investing in crypto is directly (positively) correlated with income and likely negatively correlated with age.
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Hello!
This is the most classic type of market sizing tbh.
You need to calculate total population, then segment it (ages or economic power, both would do) and then estimate % that are owners.
Hope it helps!
Cheers,
Clara
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Hi there,
Top-down approach it is! When practicing and preparing for cases, I strongly recommend you do a sanity check to see how close you were to the actual data and to get an idea of numbers for market sizing like that.
Cheers,
GB
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Hi, in addition to the solutions proposed by the other coaches in the discussion, I would like to suggest similar cases in the platform to practice with:
- https://www.preplounge.com/en/consulting-forum/how-much-would-you-charge-to-clean-all-the-windows-in-seattle-4965
- https://www.preplounge.com/en/consulting-forum/market-sizing-milk-consumption-5087
- https://www.preplounge.com/en/consulting-forum/how-would-you-calculate-the-value-of-a-cow-4982
- https://www.preplounge.com/en/consulting-forum/estimate-number-of-traffic-lights-in-a-london-5692
Hope it helps,
Antonello
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