Ethereum

Financial risk is my industry (risk is defined as return variance), yet it’s taken this ride to make me realise duh, an asset with 20% volatility is irrefutable evidence that it is an asset with no intrinsic value to anchor it. Its value is pure sentiment. I also just reviewed a journal article that quantifies it.

Retired Tradfi coder. Dedicated AI hacker. Dad cook. Dog butler.  Happy Grandpa. Known to do pop song karaoke to make universes collide.

imo, ETH’s intrinsic value is enabling end-users to use apps on ethereum and developers to deploy those apps. we can understand “app” broadly to mean anything from a simple stablecoin contract to a consumer mobile app built on an L2.

demand for both of these is not consistent over time and typically moves in concert with ETH’s price: higher price → more interest from devs and end-users. so as an asset ETH is very reactive in that sense, and trades accordingly.

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permanent impairment of capital is risk not vol

Just because a market of a certain asset is not rational doesn't mean that there is no underling value. If you take the fees generated on ethereum and divide them by its market cap you will get something very similar to a P/E often used to value traditional assets. And yes compared to a blue chip stock blockains still have terrible P/Es.