Cryptocurrency Valuations Offer Contrasting Story to Overpriced Stocks
The S&P 500 is at an all-time high in valuation territory, similar to before the dot-com bubble's collapse. Its price-to-earnings (P/E) multiple of 40.6 and price-to-sales (P/S) multiple of 3.7 are record highs.
Cryptocurrencies like Ethereum (ETH), Solana (SOL), and Hyperliquid (HYPE) have seen their financial fundamentals improve while their prices remain relatively cheap.
Ethereum's transaction fees, which get burned, mean that holding Ether is equivalent to owning a claim on the value generated by its network activity. However, most of this surplus flows to apps, layer-2 chains, and roll-ups, not to holders.
Hyperliquid offers a tighter linkage between network activity and returning value to holders, with 97% to 99% of fees going towards continuous open-market purchases of HYPE tokens. This buyback mechanism has spent over $1.3 billion repurchasing the token.