According to financial analysis experts at Investopedia, traders often estimate asset valuations using the Discounted Cash Flow (DCF) method and Earnings Multiplier models such as the Price-to-Earnings (P/E) ratio, adjusted for growth and risk (source: Investopedia, 2024). For stocks, these methods assess future cash flows or earnings potential to determine fair value, which can signal buy or sell opportunities. In the cryptocurrency market, while pure DCF is less common due to volatility and lack of traditional cash flows, similar principles are applied to projects with revenue streams, such as blockchain platforms and DeFi protocols. Knowing these valuation tools can help traders identify mispriced assets and anticipate shifts that impact both stock and crypto markets.

According to Matt Hougan, investors who express concern over blockchain protocol revenues may be underestimating the long-term bullish potential of their networks (source: @Matt_Hougan, Twitter, May 20, 2025). For traders, Hougan’s statement highlights that revenue generation can be a key indicator of sustainable ecosystem growth and increasing user adoption. Monitoring on-chain revenue trends is becoming essential for identifying undervalued tokens and protocols with robust fundamentals, especially as blockchains that generate consistent fees tend to outperform in both bull and bear markets. This insight aligns with a growing trend where trading strategies focus on fundamental metrics such as protocol revenue and user activity, rather than speculative hype.