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 it’s the stablecoin chain and the next “Bitcoin-like” opportunity for institutions.
Price leads narratives so they say.
The point here isn’t 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 “programmable Bitcoin” which intrinsically can’t 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 who’s to say MOVE shouldn’t be 50% of that? It offers a superset of Bitcoin’s functionality right?
ETH is $500B. Why shouldn’t MOVE be 100% or more of that? It’s 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.
We’ll figure out the answers to these questions in time. Fundamentals are the ultimate anchor at the limit. But until then, don’t overthink it.
There’s an enormous competitive advantage for assets that have penetrated mainstream consciousness and persisted over time.
It’s 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 it’s the stablecoin chain and the next “Bitcoin-like” opportunity for institutions.
Price leads narratives so they say.
The point here isn’t 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 “programmable Bitcoin” which intrinsically can’t 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 who’s to say ETH shouldn’t be 50% of that? It offers a superset of Bitcoin’s functionality right?
ETH is $500B. Why shouldn’t SOL be 100% or more of that? It’s 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.
We’ll figure out the answers to these questions in time. Fundamentals are the ultimate anchor at the limit. But until then, don’t overthink it.
There’s an enormous competitive advantage for assets that have penetrated mainstream consciousness and persisted over time.
It’s a game of flows and narratives until the party stops.
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