Question of the Day-How to Value Digital Currencies??

Question

Here’s a very tricky/philosophical/analytical question; What is the true value of a crypto asset? Oh, by the way, there is no “right” answer so anybody can pass this test. Of course as the world of cryptocurrencies, ICO’s and tokens become more accepted and mainstream (oh yes they will) there will have to be ways to value each of them (big new growth field). So, from Jamie Dimon’s ZERO valuations to overly optimistic calls of $1 Gazillion, here is an excellent read on valuation possibilities. OR, how about just a plain old bid/ask? Its called a market.
(Bill Taylor/CEO)


“While incumbent finance serves power players such as Jamie Dimon and Ray Dalio make headlines with ill-informed statements about Bitcoin, a younger crop of smart minds with backgrounds in traditional finance is coming up with new ways to determine the true value of the crypto assets that have zoomed up to a $170 billion market cap this year.

The most prominent among them is Chris Burniske, partner at crypto asset venture capital firm Placeholder Ventures, who just came out with a book, “Cryptoassets: The Innovative Investor’s Guide To Bitcoin And Beyond,” which he coauthored with Jack Tatar, an angel investor and crypto asset startup advisor. Burniske previously worked at ARK Investment Management, which was the first public fund manager to invest in one of the only securities to offer exposure to Bitcoin, the Bitcoin Investment Trust.

Recalling that time before the investment, Burniske says, ARK, as a fiduciary, first developed deep conviction in the technology and also in the price and the potential for its appreciation. “But when we made the investment in September 2015 and put GBTC, the Bitcoin Investment Trust, into two of ARK’s ETFs, we drew a lot of fire — we probably had more negative reactions than positive fanfare. That was ‘blockchain not Bitcoin’ season. That was when much of financial services thought these native assets to be irrelevant, or a distraction at best. People were saying, you consider yourself a specialist in technology? It’s not about Bitcoin anymore. That’s so 2013. It’s about blockchain. That just led me to dig in my heels,” says Burniske in the latest episode of my podcast…”

Full Story at Forbes.com