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Should Crypto Cash Flows Be Discounted? A Valuation Debate Rooted in Financial History
Should Crypto Cash Flows Be Discounted? A Valuation Debate Rooted in Financial History
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Warren Buffett’s foundational principle—that asset valuation hinges on discounted future cash flows—originates from John Burr’s 1938 work, but traces back to 18th-century mining valuations. The crypto market now grapples with applying this framework to digital assets lacking traditional revenue streams.
Edward Smith’s 1773 coal mine appraisal pioneered present-value calculations, a methodology now challenged by decentralized networks where tokenomics replace corporate dividends. Bitcoin’s fixed supply and Ethereum’s fee-burning mechanisms demand new models for projecting crypto cash flows.
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