October 3, 2022

A popular crypto analyst compares a decentralized crypto exchange (DEX) to traditional finance markets (TradFi) in an attempt to calculate its true value.

The anonymous host of InvestAnswers says to his 443,000 YouTube subscribers that he wants to see how decentralized finance (DeFi) platform Uniswap (UNI) stacks up against two major exchanges as well as the main crypto exchange Coinbase.

“Comparison of Uniswap with TradFi exchanges. That’s how I make a lot of my estimates. I say, “What would it be worth in the real world?”

I brought up the New York Stock Exchange [NYSE], Nasdaq, Coinbase and Uniswap. I took their market cap, I took their revenue, and I divided market cap by revenue and got different ratios.”

The analyst notes that Uniswap, with a market cap of $6.7 billion against $1 billion in revenue, is nearly twice as expensive as the NYSE by metric. While Coinbase currently has a market cap to revenue ratio of 2:1, the host believes the top US exchange could face challenges in 2023.

“Uniswap at 6.7 is the most expensive using this very crude metric. Coinbase is actually the cheapest. Things like the NYSE and Nasdaq are actually very profitable.

Coinbase could face profitability and revenue growth issues next year. That’s why it sucks, apart from all the other bad news and press it’s getting.”

Source: InvestAnswers/YouTube

The InvestAnswers host believes that decentralized exchanges, in general, have weathered the recent bear market well, and says that Uniswap could potentially triple in value despite not being “the fastest horse” in the DeFi space.

“Given the growth of DEXs and their popularity and how they have survived and thrived during this bear [market] winter, I think the future is very bright for Uniswap…

I believe DEXs are the future. [UNI is] Off 81% to all-time high and down 54% in 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 the time of writing, Uniswap is down 2.47% in the last 24 hours, trading at $8.27.


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Featured image: Shutterstock/Jorm S

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