{"id":132962,"date":"2020-05-10T11:00:00","date_gmt":"2020-05-10T10:00:00","guid":{"rendered":"https:\/\/cryptoslate.com\/?p=132962"},"modified":"2020-05-11T05:36:37","modified_gmt":"2020-05-11T04:36:37","slug":"michael-novogratz-we-should-be-valuing-ethereum-like-wall-street-values-facebook","status":"publish","type":"post","link":"https:\/\/cryptoslate.com\/michael-novogratz-we-should-be-valuing-ethereum-like-wall-street-values-facebook\/","title":{"rendered":"Michael Novogratz: We should be valuing Ethereum like Wall Street values Facebook"},"content":{"rendered":"

With cryptocurrencies, there are no cash flow statements or balance sheets an investor can analyze to get a good sense of their intrinsic value. This makes it hard for conservative Wall Street players like Warren Buffett<\/a> \u2014 who analyze their investments by discounting cash flows \u2014 from dipping their toes into Bitcoin and cryptocurrency.<\/p>\n

According to hedge fund manager Mike Novogratz<\/a>, though, Ethereum's dollar value is predicated on the concept of a network effect<\/a> \u2014 which is an economic concept that the value of a network (be that technology or money) is predicated on how many people use it.<\/p>\n

What's behind Ethereum's $20 billion market cap?<\/h2>\n

Over the past decade, cryptocurrencies have formed market capitalizations in the billions and billions of dollars. According to CryptoSlate's coin rankings page<\/a>, there are currently over 16 digital assets worth over $1 billion and 55 worth over $100 million.<\/p>\n

But that raises the question: what is behind these high valuations? How could projects just years old be worth so much?<\/p>\n

For Ethereum, at least, it's a simple network effect.<\/p>\n

Speaking on a panel at the Ethereal Virtual Summit<\/a> \u2014 the latest virtual crypto conference<\/a> \u2014 former Goldman Sachs partner Mike Novogratz shared this sentiment with Ethereum co-founder Joseph Lubin<\/a> and Forkast.news' Angie Lau.<\/p>\n