Why is SOL still undervalued relative to ETH?
Michael Nadeau is a cryptocurrency analyst who can help us answer the question, “How undervalued is Sol?” His analytical approach is not technical, nor is he a decentralized maximalist, nor does he represent any particular faction.
Ryan: All right, let’s get into this episode. We are very excited to introduce Michael Nadeau. He is the founder of DeFi Report and writes some of my favorite crypto analysis. He focuses on traditional fundamentals and analyzes tokens and crypto assets in a similar way to cash flow analysis of stocks and capital assets.
He models the demand for crypto assets as currencies and focuses more on overall fundamentals rather than attention indicators. This is a great combination of crypto-native knowledge and financial analysis. I wish the crypto world would look at crypto assets the way Michael does in his report.
Ryan: Let’s start with a leading question. We are going to talk about Solana (SOL) compared to Ethereum (ETH), which may be a bit explosive for some people. You wrote a report titled “Should Solana trade at an 83% discount to ETH”, which is roughly the current situation. We will talk about this later. First, I want to ask an overarching question: Are fundamentals having a renaissance in crypto? Recall that I define fundamentals as cash flow and how stock analysts might view these crypto assets. We've seen Maker, the blue-chip DAI token, perform well this year. Is fundamental analysis having a renaissance in crypto?
[Summary] Michael believes that fundamental analysis is having a renaissance in crypto and is key to crypto asset research. While the current market for crypto assets is still not entirely based on cash flow, fundamentals and key performance indicators (KPIs) are very important for relative valuations. By comparing fundamental data of different assets, such as Solana and Ethereum, Michael advocates a data-driven approach to analysis, which helps understand the long-term value of crypto assets.
