A Guide to Valuation Framework for Cryptoassets
Interested in learning more about the crypto and blockchain phenomena? Check out the insightful report on Valuation of Cryptoassets: A Guide for Investment Professionals by Urav Soni and Rhodri Preece, CFA, from CFA Institute Research and Policy Center.
Understanding Crypto Valuation with Microeconomics and DCF
In his article, “Crypto’s Unanswered Question: At What Price?”, Franklin J. Parker, CFA, explores the complexities of valuing cryptoassets. By integrating foundational microeconomic principles and a discounted cash flow (DCF) framework, investors can make informed decisions when buying and selling cryptocurrencies.
Parker emphasizes the importance of a logical valuation framework for crypto investments, which can provide a structured approach amid the volatility and uncertainties of the crypto market.

By applying a DCF model to estimate future prices of cryptoassets, investors can calculate the intrinsic value and compare it to current market prices. Parker highlights the importance of considering factors such as mining costs, energy consumption, and demand drivers when determining the potential value of a cryptoasset.
Estimating the price floor and ceiling for a cryptoasset involves evaluating its utility as money, store of value, and medium of exchange. These use cases influence demand and ultimately impact the asset’s price dynamics.
Investing in cryptoassets requires a cautious approach that considers risk tolerance, investment goals, and personal assumptions about future market conditions. While the crypto market may be volatile, a systematic valuation framework can help investors navigate the uncertainties and make informed decisions.
For further insights, explore Valuation of Cryptoassets: A Guide for Investment Professionals by Urav Soni and Rhodri Preece, CFA, from CFA Institute Research and Policy Center.
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Disclaimer: The views expressed in this post are solely the author’s opinions and should not be construed as investment advice. The content does not necessarily reflect the perspectives of CFA Institute or the author’s employer.
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