Expert Insights on Valuing Crypto in Bear Markets: Prioritizing Ecosystem Assets and Institutional DeFi
This article is a summary of a YouTube video "Raoul Pal & Chris Burniske: How an Expert Values Crypto" by Real Vision Crypto
TLDR Valuation methodologies for crypto during bear markets should be based on yields, with a focus on prioritizing assets within ecosystems and institutional DeFi likely being built by teams combining traditional finance experience with strong coders.
Arc Invest was the first public fund manager to give clients direct Bitcoin exposure, while 🌐 the speaker's show focuses on valuation methodologies for crypto during bear markets.
Stake-based assets should be valued based on yields, with ETH as the benchmark for real yield and risk-minimized investment in the interconnected crypto market.
Crypto markets are always-on and efficient, with active wallet adoption estimating the value of cryptocurrencies, and Bitcoin's success is due to its liquidity flow and adoption, following the global business cycle and outperforming in bull markets.
Crypto needs better yield curves and tighter spreads to grow, and institutional DeFi will likely be built by teams combining traditional finance experience with strong coders.
Investing in assets with potential for continued success and maintaining exposure to the market can lead to significant returns, while obsessing over terminal value is unnecessary.
Prioritizing assets within ecosystems can impact performance, with Avalanche prioritizing avax over Cosmos prioritizing atom, and it's important to pay attention to differences in crypto asset design and use.
Solana's lower valuations compared to Ethereum could potentially reach a value of 500 to 1K, with a focus on user-facing applications and Founders with a native understanding of the tech and ability to reach mainstream user bases.
ETH prices could soar to $3,000 or higher due to network mechanics and potential supply shortage, while BTC and ETH are poised for a run with interest from institutions and retail investors.