In crypto, there is a longing for basic valuation metrics.
Divide the company’s stock price by earnings per share to get a ratio of P/E. This can be used as a general indicator for whether a particular stock is valued too high or low.
Blockworks Research’s Real Economic value could be the starting point for something like crypto.
The problem is that no matter how the metrics turn out, they will be unsatisfactory.
Just like how P/E ratios are generally much higher than they were in previous decades — making many stocks appear wildly overvalued by comparison — it could well be that cryptocurrencies are priced much higher than what’s implied by the activity they support.
If that is the case, then I am here to add fuel to the fire.
You can see two graphs, one for Ethereum, and the other for Solana. The native token prices are plotted against their NFT/DEX volumes.
Pay attention to the white space between the trading volumes (in green) from the price of ETH (in blue) — notice how separated they are.
Ethereum DEX volumes need to be more than twice as high to overcome the current gap.
And that gap would then represent the value of the hype surrounding a particular chain — pushing the coin up to match the network’s future potential.
The kicker: The price of ETH has only really aligned with onchain trading volumes once in the past four years — where the blue line touches the green space during the Terra market crash in June 2022, when ETH bounced off $1,000 while the chain recorded $73 billion in monthly volumes across NFTs and DEX.
Here is the same graph, but with Solana. This time, it’s shown for two years, instead of four.
See how the price of SOL stretched far above any onchain activity — until this year, when monthly DEX volumes had surged tenfold in five months to almost $340 billion alongside memecoin and AI agent hype.
SOL would be a reasonable price right now, if any of these things hold any weight. Wouldn’t it be sad if anything happened?
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