How do you put the right valuation on digital assets?

The post How do you put the right valuation on digital assets? appeared on BitcoinEthereumNews.com. What’s the best way to place a value on a cryptocurrency? Take your pick, because there are dozens of options. Successful crypto investing requires a solid framework for value-based decisions. The efficient-market hypothesis suggests that prices already include all the information that is available about an asset, and that prices reflect the perfect value. However, there are thousands of examples in crypto and stock markets to contradict this theory. The reality is that markets are inefficient. Why did Apple’s stock price decline by 30% in during the Covid-19 crash in February 2020? Did Apple sell 30% fewer products? Did Apple earn 30% less? Why did GAP’s stock crash 70% over 49 days? Did the biggest clothing retailer in the United States suddenly sell 70% fewer clothes? The answer to all these questions is a resounding “No.” Markets are often irrational, and prices will not reflect value. As Warren Buffett said, “Mr. Market is a drunken psycho.” Read more Source: https://cointelegraph.com/news/6-steps-putting-valuation-digital-assets

Jun 24, 2024 - 05:00
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How do you put the right valuation on digital assets?

The post How do you put the right valuation on digital assets? appeared on BitcoinEthereumNews.com.

What’s the best way to place a value on a cryptocurrency? Take your pick, because there are dozens of options. Successful crypto investing requires a solid framework for value-based decisions. The efficient-market hypothesis suggests that prices already include all the information that is available about an asset, and that prices reflect the perfect value. However, there are thousands of examples in crypto and stock markets to contradict this theory. The reality is that markets are inefficient. Why did Apple’s stock price decline by 30% in during the Covid-19 crash in February 2020? Did Apple sell 30% fewer products? Did Apple earn 30% less? Why did GAP’s stock crash 70% over 49 days? Did the biggest clothing retailer in the United States suddenly sell 70% fewer clothes? The answer to all these questions is a resounding “No.” Markets are often irrational, and prices will not reflect value. As Warren Buffett said, “Mr. Market is a drunken psycho.” Read more Source: https://cointelegraph.com/news/6-steps-putting-valuation-digital-assets

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