Digital Assets Weekly: June 16th 2020

Market Analysis

Following a brief dip below $9,000 on Monday, Bitcoin rallied in line with other major markets to close the day at $9,450.

Bitcoin remains firmly ahead of gold as the best performing asset class on a YTD basis.

Bitcoin led all other major crypto assets over the past week by 2% - 3%.

 

FS Crypto FX 250 was the best performing index last week, finishing the week down 1.2%. All other size-based indices lagged Bitcoin.

The table below shows the returns of the largest assets and the FS Size Indexes over the year. 

Fundamental Valuations

Bitcoin’s P/CMR valuation stood at 9.4x as of 6/15 vs 9.8x as of last week. This value remains slightly below the levels from Mar-19 through present.

Bitcoin’s market cap to realized value (MV/RV) multiple was 1.6x as of 6/2 vs 1.7x last week.

The comp table for major crypto asset prices and fundamental valuations is shown below.

Valuation Methodology

The P/CMR ratio is a fundamental valuation method I invented in December 2017 that has historically been a strong predictor of price movements. It functions like a Price/Book (Crypto P/B) ratio by telling investors if a crypto asset is relatively cheap or expensive. It’s calculated by comparing the Market Cap to Cumulative Mining Revenue (Mkt Cap/CMR). The ratio can be calculated on a...