An answer to crypto’s unanswered question: At what price?
A discounted cash flow framework can be applied to crypto assets to arrive at a range of valuations to guide investors
A FEW foundational microeconomic assumptions and a discounted cash flow (DCF) framework can help inform crypto buy and sell decisions.
An article by Franklin Parker, Crypto’s Unanswered Question: At What Price?, published last August, highlights a conversation I often have with other CFA charterholders, investors and clients. These discussions have led to both valuable thought exercises and rousing debates.
I am not a crypto expert and certainly not a crypto “bro”. I have no strong opinion on whether crypto assets are undervalued or overvalued, whether they are the future of money and commerce, or a fad that we will all look back on in amusement. Nevertheless, I believe crypto investors can employ a logical valuation framework by which they can make reasonable and informed investment decisions.
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