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“Crypto valuation Models Are Just A Bit Backward” says Michael Casey

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Crypto markets are in the mood of their own and as one thinks the floor is reached, the markets plunge again. With markets collapsing without an actual change in the fundamentals of Bitcoin and other major cryptocurrencies, all discussion has now moved to one question – “What is the fair value of Bitcoin”. Recently Michael Casey, a well-recognized author, and the co-founder of Network Effects Media spoke to a media outlet saying that valuation models used to valuing cryptos and bitcoin are wrong.

Casey concentrates on valuation methods while others discuss fair values

Michael Casey, a well-recognized author, and the co-founder of Network Effects Media said in an interview with a media outlet, that the crypto market’s valuation models are “all just a bit backward.”  Expanding on what he meant, Casey explained that cryptocurrencies and blockchain technologies are foreseen as a way to disintermediate or remove intermediates from the ecosystem and curb centralization of entities. But when it comes to valuing these crypto assets, the models used are very similar to the once that are used for traditional markets instruments.

He added, “we’re continually denoting BTC’s value in dollar signs, rather than the iconic Bitcoin”.  In other words, he said that much of the crypto market is focused on a positive exit into fiat, rather than maintaining the skin in the game. Casey added that this causes incentives to get misaligned, as investors look for profit, instead of overthrowing the often-corrupt powers that be

Casey is not the only one that is now looking at the valuation of cryptocurrencies. Recently Stephen Pair, CEO of the world-renowned crypto-friendly payment processor BitPay, spoke to CNBC Squawk Box where he mentioned that the Bitcoin Price is currently driven by speculations and is very divergent from what its actual price could be.

Another prominent crypto bull which spoke about the valuation and fair market value of Bitcoin is Tome Lee. The Fundstrat Global Advisors Head of Research recently stated that the current market conditions for Bitcoin are wrong and he believes BTC’s fair value is between $13,800 and $14,800.

“Bitcoin’s fair value, given the number of active wallet addresses, usage per account and factors influencing supply, is between $13,800 and $14,800”. – Lee said to Bloomberg

He further added that “Fair value is significantly higher than the current price of Bitcoin. In fact, working backward, to solve for the current price of Bitcoin, this implies crypto wallets should fall to 17 million from 50 million currently.”

Another crypto enthusiast Morgan Creek’s Anthony Pompliano, in his recent post, had spoken about several parameters that Bitcoin fundaments were growing and this market meltdown was currently not justified


In his post, Pompliano also mentioned to his readers that

“Don’t be distracted by the noise. Focus on the fundamentals. Bitcoin isn’t going anywhere.”

With so much spoken about valuation and fair prices no one actually knows why the markets collapsed or where the floor for this fall is. But one thing is definite Bitcoin usage is getting wider as more and more people are aware of it. Will the market bounce back, well let’s wait and watch

What do you think is the bottom of this market? What do you think will the next trigger for this market? Do let us know your views on the same.

The post “Crypto valuation Models Are Just A Bit Backward” says Michael Casey appeared first on Coingape.