Time and again I see people overthink L1 valuations.
The only difference between $.11 MOVE and $1.2 is Coinbase.
In April Movement was a dying platform. Today itâs the stablecoin chain and the next âBitcoin-likeâ opportunity for institutions.
Price leads narratives so they say.
The point here isnât about whether any of this is justified.
The point is that the absence of agreed upon valuation methodologies creates a void that only narratives and relative frameworks can fill.
Is the MOVE bull case that it becomes a take rate on global GDP? What about it becoming âprogrammable Bitcoinâ which intrinsically canât be valued? How about both? The truth is no one knows.
So what happens when the market instead anchors to relative value and narratives?
Well BTC is $2 trillion. So whoâs to say MOVE shouldnât be 50% of that? It offers a superset of Bitcoinâs functionality right?
ETH is $500B. Why shouldnât MOVE be 100% or more of that? Itâs the superior product with greater traction across almost every economic metric.
These exercises are goofy. But again we can theorize all we want, or navigate the environment in front of us.
Weâll figure out the answers to these questions in time. Fundamentals are the ultimate anchor at the limit. But until then, donât overthink it.
Thereâs an enormous competitive advantage for assets that have penetrated mainstream consciousness and persisted over time.
Itâs a game of flows and narratives until the party stops.
Time and again I see people overthink L1 valuations.
The only difference between $1400 ETH and $5000 ETH was Bitmine.
In April Ethereum was a dying platform. Today itâs the stablecoin chain and the next âBitcoin-likeâ opportunity for institutions.
Price leads narratives so they say.
The point here isnât about whether any of this is justified.
The point is that the absence of agreed upon valuation methodologies creates a void that only narratives and relative frameworks can fill.
Is the ETH bull case that it becomes a take rate on global GDP? What about it becoming âprogrammable Bitcoinâ which intrinsically canât be valued? How about both? The truth is no one knows.
So what happens when the market instead anchors to relative value and narratives?
Well BTC is $2 trillion. So whoâs to say ETH shouldnât be 50% of that? It offers a superset of Bitcoinâs functionality right?
ETH is $500B. Why shouldnât SOL be 100% or more of that? Itâs the superior product with greater traction across almost every economic metric.
These exercises are goofy. But again we can theorize all we want, or navigate the environment in front of us.
Weâll figure out the answers to these questions in time. Fundamentals are the ultimate anchor at the limit. But until then, donât overthink it.
Thereâs an enormous competitive advantage for assets that have penetrated mainstream consciousness and persisted over time.
Itâs a game of flows and narratives until the party stops.
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