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Intrinsic value in crypto currencies

Author

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  • García-Monleón, Fernando
  • Danvila-del-Valle, Ignacio
  • Lara, Francisco J.

Abstract

Over the last years, cryptocurrencies have acquired a growing social and economic interest. The most representative features of this new phenomenon are strong price increases and high volatility. The investigations developed in this field are not excessively numerous nor unanimous. Some researches consider this phenomenon to be a bubble, since they don't agree that the price pattern of the cryptocurrencies is justified or explained by their intrinsic value. The present article aims to provide a theoretical framework for the assessment of these new realities embodied by cryptocurrencies. We have created a model which differentiates two types of cryptocurrencies: the cryptocurrencies meant to fund a specific project, and the cryptocurrencies designed for general or non-specific uses. We will also make a distinction between block chain networks designed to work only with cryptocurrencies from those which admit other tasks. Our model establishes the difference between the value of the currency and that of the network. The result of this research is a theoretical valuation model based on three fundamental categories of cryptocurrencies by purpose or finality.

Suggested Citation

  • García-Monleón, Fernando & Danvila-del-Valle, Ignacio & Lara, Francisco J., 2021. "Intrinsic value in crypto currencies," Technological Forecasting and Social Change, Elsevier, vol. 162(C).
    • Handle: RePEc:eee:tefoso:v:162:y:2021:i:c:s0040162520312191
    DOI: 10.1016/j.techfore.2020.120393
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    2. Kraus, Sascha & Kumar, Satish & Lim, Weng Marc & Kaur, Jaspreet & Sharma, Anuj & Schiavone, Francesco, 2023. "From moon landing to metaverse: Tracing the evolution of Technological Forecasting and Social Change," Technological Forecasting and Social Change, Elsevier, vol. 189(C).
    3. Min Shu & Ruiqiang Song & Wei Zhu, 2021. "The 2021 Bitcoin Bubbles and Crashes—Detection and Classification," Stats, MDPI, vol. 4(4), pages 1-21, November.
    4. Chu, Meifen, 2021. "Bitcoin and traditional currencies during the Covid-19 pandemic period," MPRA Paper 110117, University Library of Munich, Germany.
    5. Luo, Di & Mishra, Tapas & Yarovaya, Larisa & Zhang, Zhuang, 2021. "Investing during a Fintech Revolution: Ambiguity and return risk in cryptocurrencies," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 73(C).
    6. Costantini, Mauro & Maaitah, Ahmad & Mishra, Tapas & Sousa, Ricardo M., 2023. "Bitcoin market networks and cyberattacks," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 630(C).
    7. Yang, Zixiu & Fantazzini, Dean, 2022. "Using crypto assets pricing methods to build technical oscillators for short-term bitcoin trading," MPRA Paper 115508, University Library of Munich, Germany.

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