🥛 3 ways to determine a token’s fair price
GM! Welcome to Milk Road PRO – your weekly jolt of crypto insights that's hotter than slick bacon on a Las Vegas solar panel. 🥓☀️
Today, we're going to be a practical Paul. You shop every day, but sometimes you skip that fancy latte because it’s just too pricey, right?
Now, when it comes to buying tokens, how can you tell if they're overpriced? Nobody wants to splurge on something that's too expensive.🧠
Check out the chart below. It shows the price performance of 2 different tokens. Do you think the orange one is overpriced and the blue one is a steal?
Alright, so eyeballing charts like this isn't the way to go. But many people rely on charts alone to gauge a token's value. So what is the right move?
People should compare the current price to some “fair” price (intrinsic value). See the chart below. 👇
Now, how do you figure out intrinsic value? Our mission is to find this out today. We’ll break down three methods to nail down the “fair” price:
Relative comparison
Over/undervalued using the annualized revenue to market cap ratio
Potential valuation based on projected revenue to market cap ratio
Sound complicated? Don’t sweat it. We’ll guide you step-by-step with real-world examples:
Is $SOL overpriced compared to $ETH?
What is the fair price of $LDO?
Plus, we’ve got some killer tips at the end to help you value any token like a PRO!
🚨 This report is inspired by one of the modules in our Crypto Investing Masterclass.
By reading this report, you’ll have a deep understanding of how to value crypto assets and how to pick winning investments.
However, if you’re hungry for more foundational insights such as:
How crypto cycles work
How the flow of liquidity works
How to allocate your portfolio to minimize risk and MAXIMIZE the upside
And more…
Then we recommend you take the Crypto Investing Masterclass today, so you can build a long-standing crypto portfolio in the future.
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Aight, back to the report. Let’s go!! ⤵️
(There’s a competition for you 🫵 at the end so stick around. 👀)
RELATIVE COMPARISON ⚖️
Time to roll up those sleeves and get practical. This approach is all about gathering similar projects and comparing their valuations to figure out the fair value.
Let’s kick things off with an example and then we’ll break down the pros and cons of this method.
In our example, we'll assess both onchain numbers and qualitative metrics.
This gives us a more complete picture and helps make more accurate comparisons, giving us greater confidence in the results.
Here’s the kicker: Instead of comparing a token to a bunch of others (which can get messy), we focus on one single token. This keeps things clean and avoids unnecessary noise.
Therefore, we choose to compare our token with the market leader or a major player in the sector.
This strategy helps us reduce the risk of inaccuracies from mispriced tokens, ensuring a more reliable assessment.
However this is our approach. We prefer quality over quantity.🧐
Feel free to tweak this approach to fit your needs. You might want to zero in on specific metrics like TVL, or even compare your token to a handful of others.
Catch the drift? The more effort you put into this analysis, the more confidence you can have in your results.
Alright, with all that being said, let's finally show you an example:
Is $SOL overpriced or underpriced? Let’s milk this approach step by step:
Uh, Oh… 😧 The rest of this report is exclusive to Milk Road PRO members!
WHAT’S LEFT INSIDE? 👀
An in-depth roadmap to finding a token’s “fair price”
Everything you need for our valuation analysis contest!
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