New Research Highlights Challenges in Establishing Crypto Valuation Metrics
There is increasing interest in fundamental valuation metrics for cryptocurrencies. Current discussions suggest the development of a metric similar to the P/E ratio in stocks, with Blockworks Research proposing the Real Economic Value.
Challenges persist; cryptocurrencies might be overvalued compared to their underlying activity. Key points include:
- Charts show a disconnect between token prices and trading volumes for Ethereum and Solana.
- Ethereum's price (ETH) would need DEX volumes to more than double to align with its theoretical value.
- Historically, ETH prices have only matched onchain trading volumes once in four years, during the June 2022 market crash.
- Solana's price (SOL) has risen above onchain activity until recent months when trading volumes surged significantly.
- If current trends hold, SOL may now be reasonably priced based on its DEX activity.