Cryptoassets can be valued using absolute or relative models, comparing them to commodities or other assets.
Valuation models are essential for determining market value and aiding investors in decision-making processes.
Understanding market cyclicality and reflexive dynamics is crucial for assessing investment opportunities in the crypto space.
Deep dives
Valuation Models in Crypto
Different valuation approaches in crypto are discussed, including absolute and relative models. Absolute valuation methods involve treating cryptocurrencies like commodities or companies, while relative approaches compare crypto prices with other asset classes like gold.
Importance of Valuation Models
Valuation models are crucial for providing a sense of solidity and establishing whether a market is undervalued or overvalued. Institutional investors seek these models to evaluate the market, while traders use them to compare cycles and on-chain dynamics.
Cyclicality and Market Reflectivity
Understanding cyclicality and market reflectivity in crypto markets is essential for gauging the dynamics of market movements. The influence of booms and busts, leverage, and reflexivity on investments is crucial in decision-making.
Bitcoin as a Store of Value
Bitcoin's role as a store of value is highlighted, especially in an inflationary economic scenario. The narrative around Bitcoin's scarcity, mining projects, and institutional adoption contribute to its emerging position as a wealth base and treasury asset.
Long-Term Crypto Trends and Uncertainties
Exploring long-term trends and uncertainties in the crypto space, including zero-knowledge proofs, layer 1 innovations, and the emergence of new narratives. The evolving nature of valuation approaches and the unpredictability of trends over extended timeframes pose challenges for future predictions.
With BTC and ETH making new ATHs, new and old investors are asking themselves the same question: How do you value cryptoassets?
Listen to conversations between Su Zhu, the CEO and CIO of Three Arrows Capital, and Hasu, an experienced crypto researcher and writer. Together with occasional guests, we explore the transformative nature of trust-minimized currency and financial services.
