A popular crypto analyst is comparing a decentralized crypto exchange (DEX) to traditional finance (TradFi) marketplaces in an effort to calculate its real-world value.
The anonymous host of InvestAnswers tells his 443,000 YouTube subscribers that he wants to see how the decentralized finance (DeFi) platform Uniswap (UNI) stacks up against two mainstream stock markets as well as the centralized crypto exchange Coinbase.
“Comparing Uniswap to TradFi exchanges. That’s how I do a lot of my valuations. I say, ‘What would it be worth in the real world?’
I pulled up New York Stock Exchange [NYSE], Nasdaq, Coinbase and Uniswap. I took their market caps, took their revenue, and divided market cap by revenue and got different ratios.”
The analyst notes that Uniswap, with a $6.7 billion market cap versus $1 billion in revenue, is nearly twice as pricey as the NYSE based on the metric. While Coinbase currently has a 2:1 ratio of market capitalization to revenue, the host thinks the leading US exchange could face challenges in 2023.
“Uniswap at 6.7 is the most expensive using that very crude metric. Coinbase is actually the cheapest. Things like NYSE and Nasdaq are actually very profitable.
Coinbase could be running into profitability problems and revenue growth problems next year. That’s why it’s getting dinged, apart from all the other bad news and press that it’s getting.”
The InvestAnswers host believes that decentralized exchanges, in general, have weathered the recent bear market well and says Uniswap could possibly triple in value despite not being “the fastest horse” in the DeFi niche.
“Considering the growth of DEXs and their popularity and how they’ve survived and thrived during this bear [market] winter, I think the future is very bright for Uniswap…
DEXs I believe are the future. [UNI is] 81% off the all-time high and down 54% over the last 12 months. The question is, could Uniswap do a 3x from here? I say, yes it could. But are there faster horses? Yes.
Will inflation cause price suppression? Yes. But could this 3x? Yes.
I don’t own Uniswap. I did last year, but not anymore.”
At time of writing, Uniswap is down 2.47% in the past 24 hours, trading for $8.27.
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