We have curated this collection of research to serve as the primary repository for the most impactful work done in the nascent but fascinating field of crypto asset valuation. We believe this is deeply important work presented by the most talented minds in our space. It is an honor to share it with you.
Whether you are 10 hours or 10,000 hours into your crypto research journey, we hope this can be your single source for staying up-to-date on groundbreaking crypto asset valuation research.
To help you orient yourself with respect to the content, we have divided the research into four sections: Quantitative, Qualitative, Papers and Tools.
We insist this be an interactive experience, so please upvote your favorite articles. We thought a TCR would have been a bit of an overkill, but you get the idea.
Finally, this valuation depot is by no means meant to be comprehensive. There’s new research coming out every day and we probably missed some important things along the way. So by all means, if you have a contribution, please email us the link at firstname.lastname@example.org and we’ll get it up here.
Our lawyers would also like us to remind you that none of this is investment advice.
Reserve Risk in 2019 has recently hit a low near what was seen in 2011, but not quite as low as in 2015. Binary Adjusted BDD, VOCD and Reserve Risk give us conviction the market bottom is behind us, and give us clues to what the future may look like.
May 30, 2019
Realized Cap assigns a price to each UTXO at the time of last outgoing transaction. Realized Cap de-emphasizes lost or unused tokens and presents a final layer of the entire ecosystem’s cost basis.
December 14, 2018
Begins with an excellent summary on Bitcoin valuation history and subsequently introduces 1) Relative Unrealized P&L, which quantifies investor sentiment; 2) Liveness, which quantifies the extent to which savers are using a crypto; and 3) HODLer Net Position Change, which quantifies whale buying and selling.
February 20, 2019
Delta Cap is a hybrid indicator that is partially fundamental analysis and partially technical analysis. Delta Cap is the difference between Realized Cap as defined by CoinMetrics and Average Cap defined as the simple moving average of market capitalization life-to-date.
February 14, 2019
Building on top of Nic Carter's Realized Cap metric, Realized Cap is compared to Market Cap, which is presented historically side-by-side and also as an oscillating ratio. MVRV has become a staple valuation metric.
October 1, 2018
A compelling case made for the accuracy of logarithmic regression in predicting BTC price. Uses Facebook user growth to exemplify the power of this methodology. Adding bull and bear cycle analysis on top of the logarithmic regression increases forecasting precision.
Ocotober 28, 2018
Building on top of MVRV, "MVRV Z" normalizes the MVRV oscillator as a Z-score and compares that to BTC historical Market Cap, Realized Cap and the log trend of Realized Cap. Even further signal is brought to the Realized Cap metric with this article.
October 9, 2018
The HODL Wave chart is a seminal visualization of the BTC’s UTXO age distribution, bucketed into age categories from <1D to>5Y. HODL Waves is the historical analysis of large-scale market behavior.
April 17, 2018
Liveliness is defined as the ratio of the sum of Bitcoin Days Destroyed to the sum of Bitcoin Days Created and is presented as a percentage from 0 to 100%. Liveliness gives insight to behavior of investors. It increases as long-term holders liquidate positions and decreases while they accumulate and HODL.
December 29, 2018
Network Momentum quantifies the relationship between Bitcoin’s price and the BTC value of daily transactions flowing through the blockchain. Introduces three phases of BTC cycles based on differing stages of that relationship: 1) Early bear phase; 2) Late bear phase; and Bull phase.
October 28, 2018
NVT Ratio is the ratio of network value to transactions value and is used to identify periods of over and under valuation.
October 5, 2017
Builds on the existing NVT Ratio work, modifying the original approach from Willy Woo by using a 90-day trailing average rather than the 14 day forward and 14 day trailing average presented by Woo. The 90-day trailing average presents a faster signal for identifying tops.
February 3, 2018
Theoretical framework comparing the purchase of a crypto asset today to a call option on massive potential future upside with an unknown, but potentially long timeframe and enormous volatility.
March 5, 2018
Proposes a Price-to-Metcalfe Ratio using a smoothed, modified Metcalfe-implied price based on active addresses.
February 13, 2018
Metcalfe's and modifications to Metcalfe's Law are applied to Daily Active Addresses to create upper and lower bounds for Bitcoin Valuation based on network activity.
May 21, 2018
A critique of the INET valuation model as presented by Chris Burniske and an in-depth review of Velocity as it is currently understood for crypto assets.
January 18, 2018
Presents a modified Metcalfe approach to valuing crypto assets via application of the Netoid Function to daily active addresses.
June 15, 2017
Wences Casares, CEO of the Bitcoin wallet company Xapo makes a case for allocating a small amount of every portfolio to Bitcoin because of the unique value Bitcoin has via its sovereignty, and the potential for large returns relative to the risk taken.
Highlights the Velocity Problem for utility tokens, makes the comparison of utility tokens to working capital and proposes that any crypto asset that is not viewed as a store of value will have a difficult time accruing value over the long-term.
April 2, 2018
A formative thesis on the investment opportunity set of the crypto asset landscape.
December 29, 2017
Introduces the concept of productive and non-productive crypto asset classifications and presents differing valuation characteristics for each.
August 1, 2018
A foundational taxonomy of token characteristics and framework for assesing crypto asset utility.
June 10, 2017
An hour long conference call with slide presentation on crypto asset valuation fundamentals. Some of this material has subsequently been disproven.
September 9, 2017
Introductory overview of two types of utility token models that may be promising: 1) Work Tokens; and 2) Burn-and-Mint Equilibrium.
February 13, 2018
A reworking of MV=PQ into a form more fitting for crypto assets and a discussion of velocity characteristics and implications.
October 17, 2017
A concise review of existing crypto asset valuation methodologies and ideas around additional methodologies that could be explored. Excellent reference appendix included.
March 6, 2018
An important qualitative valuation framework that introduces the concept of Total Value being the summation Current Utility Value and Discounted Expected Utility Value. The growth and oscillation expectations of these factors are reviewed.
August 12, 2017
An in-depth critique of MV=PQ and commentary around the characteristics of the components.
February 23, 2018
Detailed examination of Velocity in the context of MV=PQ. Discusses velocity in terms of too high, too low and just right. One of the first articles to shine a spotlight on the Velocity Problem.
October 31, 2017
There is an emerging consensus that velocity is a confounding problem in establishing cryptoasset value for single utility tokens.
A brief review of existing commentary on Velocity and new incremental examinations of the characteristics and implications of Velocity.
February 23, 2018
A foundational taxonomy of crypto asset categories including examples of each, the valuation implications for those categories and a helpful appendix of references.
April 1, 2018
This paper reveals the interdependence between social signals and price in the Bitcoin economy, namely a social feedback cycle based on word-of-mouth effect and a user-driven adoption cycle.
April 17, 2018
Explores the relationship between the “buzz factor” and investment returns. The report finds that crypto assets do not behave similarly to traditional currencies or commodities and that the industry is much more mature, and less speculative, than most assume.
January 13, 20170 Likes
Addresses the valuation of Bitcoin and other blockchain tokens in a new type of production economy: a decentralized financial network. This is one of the first economic models to incorporate both supply and demand side assumptions for Bitcoin.
March 20, 20180 Likes
We develop a strong diagnostic for bubbles and crashes in bitcoin, by analyzing the coincidence (and its absence) of fundamental and technical indicators. Using a generalized Metcalfe's law based on network properties, a fundamental value is quantified and shown to be heavily exceeded, on at least four occasions, by bubbles that grow and burst.
March 15, 20180 Likes
This paper demonstrates that bitcoin’s medium- to long-term price follows Metcalfe’s law. Bitcoin is modeled as a token digital currency, a medium of exchange with no intrinsic value that is transacted within a defined electronic network.
January 22, 2018
This is an outstanding resource to learn about and track on-chain metrics. Credit to Philip Swift.
One of the most trusted data providers in the crypto asset space. Coinmetrics provides clarity around their data cleansing methods, and the team has developed a number of new analysis approaches. The charting feature provides an easy way for users to explore valuation methods.
An easy-to-use site for tracking a wide range of pre-defined investment, economic and network metrics for Bitcoin.
Live chart of age distribution for Bitcoin’s UTXO set dating back to the genesis block. This chart can help with analysis of ownership tendencies throughout Bitcoin’s history and through market cycles.
A snapshot of real-time Bitcoin volatility that looks at the standard deviation of daily returns for the preceding 30- and 60-day windows. These are measures of historical volatility.