This thesis aims at elaborating fundamental valuation techniques for crypto assets. Since research in this field is still at the very beginning this work intends to provide investors, financial analysts, token issuers, researchers or crypto enthusiasts a framework of how to determine the fundamental value of this emerging asset class. To do so, three main research questions are formulated:
1. How can the fundamental value of crypto assets be determined?
2. Which valuation techniques can be applied to the different token types?
3. What is the fundamental value of the IOTA token?
In order to answer the questions, the thesis will progress in the following manner: First, the reader will be introduced to distributed ledger technology (DLT) and blockchain, which represent the underlying technology of crypto assets. In the next step the term ‘crypto asset’ will be defined. It will be elaborated to what extent crypto assets can be considered as a new asset class and how crypto assets can be classified into different types. The terminological part will end up with a discussion of the fundamental value of this new asset class.
The main body of the thesis consists of two parts, a theoretical (conceptual) and a practical (applicational) part. The theoretical part aims to collect and evaluate all current valuation methods for crypto assets. Different absolute as well as relative valuation techniques will be elaborated, namely the Discounted Cash Flow (DCF) model and CAPM, the asset rotation theory, the Equation of Exchange, the NVT ratio, Metcalfe’s Law, the cost of production approach as well as the accessibility discount. The second part of the main body comprises a case application of one valuation model, namely the Equation of Exchange, to the IOTA token.
Inhaltsverzeichnis (Table of Contents)
- Introduction
- Objective and approach of the thesis
- Terminology and definitions
- Definition of distributed ledger technology and blockchain
- Definition and classification of crypto assets
- About the fundamental value of crypto assets
- Conceptual framework: Valuation techniques of crypto assets
- Discounted Cash Flow (DCF) and CAPM
- Asset rotation theory
- Equation of Exchange (Quantity Theory of Money)
- Network Value to Transaction (NVT) ratio
- Metcalfe's Law
- Cost of production approach
- Accessibility discount
- Key findings
- Case application: Valuation of the IOTA token
- About IOTA
- Valuation of IOTA
Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)
This master thesis aims to develop a conceptual framework for the valuation of crypto assets. The thesis analyzes various valuation techniques, specifically focusing on the application to the IOTA token. The work investigates the characteristics of crypto assets, their fundamental value, and the applicability of traditional and novel valuation methods.
- Valuation of crypto assets
- Distributed ledger technology (DLT) and blockchain
- IOTA token
- Application of traditional and novel valuation techniques
- Fundamental value of crypto assets
Zusammenfassung der Kapitel (Chapter Summaries)
The introduction sets the stage for the thesis by providing a brief overview of the research context and the significance of crypto assets. It also outlines the objectives and approach of the study. Chapter 3 delves into the terminology and definitions related to DLT, blockchain, and crypto assets. It discusses the classification of crypto assets and explores the concept of fundamental value. Chapter 4 presents a comprehensive conceptual framework for the valuation of crypto assets, exploring various techniques like discounted cash flow (DCF), asset rotation theory, the equation of exchange, network value to transaction (NVT) ratio, Metcalfe's Law, cost of production approach, and accessibility discount. This chapter also discusses the key findings of the valuation techniques. Finally, Chapter 5 presents a case application of the valuation framework by focusing on the IOTA token. It provides a brief overview of IOTA and its functionalities before applying the valuation techniques to assess its value.
Schlüsselwörter (Keywords)
This thesis revolves around the valuation of crypto assets, particularly the IOTA token. Key concepts include distributed ledger technology, blockchain, fundamental value, valuation techniques such as DCF, NVT ratio, and Metcalfe's Law. The analysis also explores the characteristics and functionalities of the IOTA token.
- Citar trabajo
- Abdulkarim Ajouaou Saidi (Autor), 2018, Valuation of Crypto Assets. A Conceptual Framework and Case Application to the IOTA Token, Múnich, GRIN Verlag, https://www.grin.com/document/494016
