The total value of all cryptocurrency assets has just exceeded $3 trillion.
This means the entire crypto sector is around 20% more valuable than the equity of the two biggest tech companies -- Apple and Microsoft -- put together trib.al/VUnXork
This means the entire crypto sector is around 20% more valuable than the equity of the two biggest tech companies -- Apple and Microsoft -- put together trib.al/VUnXork
The previous crypto bull run peaked at the end of 2017 at about $800 billion.
In 2018, crypto crashed almost 90%. But over the next three years, crypto recouped the lost ground and is back at its peak valuation compared to tech companies trib.al/p8LQVoz
In 2018, crypto crashed almost 90%. But over the next three years, crypto recouped the lost ground and is back at its peak valuation compared to tech companies trib.al/p8LQVoz
One way to analyze crypto valuation is to consider the sector like a tech company.
There are thousands of ideas out there: Some are traditional services that crypto can arguably deliver cheaper and better than centralized finance, others are entirely new trib.al/p8LQVoz
There are thousands of ideas out there: Some are traditional services that crypto can arguably deliver cheaper and better than centralized finance, others are entirely new trib.al/p8LQVoz
The potential of crypto is far greater than any one company today, but the risk is far higher.
Crypto may never generate significant profits to investors, while Apple and Microsoft have large revenues and profits trib.al/p8LQVoz
Crypto may never generate significant profits to investors, while Apple and Microsoft have large revenues and profits trib.al/p8LQVoz
Taking this view, you have to be an optimist to like crypto at these prices:
➡️Price-to-earnings ratio for the S&P 500 is near all-time highs
➡️Tech valuations are stratospheric
➡️Crypto is selling at its all-time high ratio to the largest tech companies trib.al/p8LQVoz
➡️Price-to-earnings ratio for the S&P 500 is near all-time highs
➡️Tech valuations are stratospheric
➡️Crypto is selling at its all-time high ratio to the largest tech companies trib.al/p8LQVoz
Another way to get a handle on crypto value is to consider it a separate economy.
The less certain you are about the value of something, the more important it is to pick a value and stick with it trib.al/p8LQVoz
The less certain you are about the value of something, the more important it is to pick a value and stick with it trib.al/p8LQVoz
Today, crypto is about 3% of total global equity value, so you could keep 3% of your portfolio allocated to crypto.
Someone who sees a bigger future for crypto might find it fairly priced -- or even undervalued
trib.al/p8LQVoz
Someone who sees a bigger future for crypto might find it fairly priced -- or even undervalued
trib.al/p8LQVoz
Another valuation approach to crypto is as an alternative to the traditional financial system.
From this perspective, crypto is worth $3 trillion because dollars are less solid than they used to be, not because crypto has developed better than expected
trib.al/p8LQVoz
From this perspective, crypto is worth $3 trillion because dollars are less solid than they used to be, not because crypto has developed better than expected
trib.al/p8LQVoz
There is a case for optimists that crypto can go up from here.
And there’s a case for pessimists that high traditional asset valuations and shaky traditional currencies make crypto worth its high prices
trib.al/p8LQVoz
And there’s a case for pessimists that high traditional asset valuations and shaky traditional currencies make crypto worth its high prices
trib.al/p8LQVoz
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