A popular crypto analyst compares the decentralized cryptocurrency exchange (DEX) to the traditional financial markets (TradFi) in an effort to calculate its true value.
The host of Anonymous InvestAnswers tells YouTube’s 443,000 subscribers that he wants to see how Uniswap (UNI)’s decentralized finance (DeFi) system compares to two traditional stock exchanges as well as central crypto exchange Coinbase.
Comparing Uniswap with TradFi Exchanges. This is how I do a lot of my reviews. I say, “What’s that worth in the real world?”
You shot the New York Stock Exchange [NYSE]Nasdaq, Coinbase and Uniswap. I took their market limits, took their profits, divided the market value by the profits, and got different ratios.
The analyst notes that Uniswap, with a market capitalization of $6.7 billion against $1 billion in revenue, is nearly double the cost of the New York Stock Exchange on a metric basis. While Coinbase currently has a cap-to-market ratio of 2:1, the host believes that the major US exchanges may face challenges in 2023.
Uniswap at 6.7 is the most expensive on this very coarse scale. Coinbase is actually the cheapest. Things like the NYSE and Nasdaq are actually very profitable.
Coinbase may face profitability and revenue growth issues next year. That’s why it seems, regardless of all the bad news and press he gets.
The InvestAnswers host believes that decentralized exchanges, in general, have held up well in the recent bear market and claims that Uniswap could eventually triple even though it is not the “fastest horse” in the DeFi niche.
“Given the growth and popularity of DEXs and how they have survived and thrived during this bear [market] Winter, I think the future is very bright for Uniswap…
I think DEXs are the future. [UNI is] 81% down from all-time highs and 54% down in the last 12 months. The question is, can Uniswap do 3x from here? I say, yes it can. But are there faster horses? yes.
Will inflation lead to price pressure? yes. But can it reach 3 times more? yes.
I do not own Uniswap. I did this last year, but not anymore.
At the time of writing, Uniswap is down 2.47% in the past 24 hours, trading at $8.27.
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Featured Image: Shutterstock / Jorm S