Is ETH still expensive?

Is ETH still expensive?


In my last post, I introduced readers to a quantitative tool used to evaluate the risk adjusted performance of an asset relative to its own history.  This is useful because it allows us to compare different assets with different risk/return profiles on an apples to apples basis.   Obviously, the big picture goal here is to  either 1)  buy low/sell high or  2) avoid buying at the top and focus your accumulation during periods where 'value' is more apparent. 

In this post, I run ETH through the same tool using weekly data (last update was 6/9).   I also look at historical drawdowns using daily data (last update was 6/14).   Several observations in looking at the charts below.

1)  We are in the middle of its third largest drawdown in terms of magnitude.  This time around,  it looks to have bottomed out around -54% (so far) using the daily time series I have.  The other 2 drawdowns that were larger both exceeded -60%. 

2)  In terms of the length of the drawdown, we are in the 5th longest at about 34 days.   Previous drawdowns included 395 days, 186 days, 76 days, and 37 days.

3) Looking at the ETH StratVal chart, it is interesting to note that it has not come off as hard as BTC on a rolling risk adjusted performance basis (see prior post).  Has BTC's outperformance this week been solely due to BTC specific news?  Or was it more compressed than ETH and simply coiled for a harder bounce?     

As always, this is not investment advice and please do you own research.  If you find this type of commentary useful, please support or leave comments as I have a variety of tools I can consolidate into periodic posts to evaluate some of the more popular crypto projects.  Happy hodling!

 

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NZFX
NZFX

Pursuing interesting conversations that help lead to truth. Twitter: @NZFX6


From skeptic to hodlr to investor
From skeptic to hodlr to investor

In this article, I apply a quantitative tool used by institutional investors to to try to determine where fair value is for Bitcoin. My hope is that it will help people avoid the mistake of buying high and selling low.

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