Cryptocurrency Asset Valuation

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Intrinsic provides valuation services to private equity, venture capital, limited partners, and corporations looking for a conflict free assessment of the value of cryptocurrency assets.

Intrinsic excels in valuing startups and/or assets at the cutting edge of industry. Cryptocurrency assets provide a unique tool to both incentivize employees and raise capital. As a manager of a cryptocurrency asset, uncertainty in valuation may make it more difficult to retain key employees and provide them a conflict-free assessment of their compensation.

IRS guidance indicates that token-based incentive programs will be treated the same as equity compensation, which implies meaningful tax penalties if appropriate techniques are not utilized. Intrinsic can help avoid unforseen tax potholes through our experienced staff and audit-ready valuation reports.

Intrinsic analyzes the following three core components of valuing both the underlying digital asset as well as shareholder equity.

  1. Utility – Coins must have a specific use-case. The specific voting rights, ‘dividend’ payments, and other corporate governance mechanisms must be analyzed on a case-by-case basis.
  2. Scarcity – Coins employ multiple mechanisms for transaction protocol, which involve opportunity costs when considering security, speed, etc. Furthermore, future hard forks in protocols must be evaluated.
  3. Product Analysis – As growth stories for these assets are still in infancy, a valuation analyst must have a breadth of knowledge to compare positive and negative features of each technology.

Please reach out to us for a free consultation today!

Our recent blogposts on blockchain technologies and cryptocurrency assets:

Bitcoin Volatility: Evidence of Market Maturity After Cryptocurrency Bubble

Policy & Procedures Checklist for Private Equity Investments in the Blockchain Industry

Publicly Traded Blockchain Companies: Understanding Risk for a New Market