Ethereum Fundamental Value Model (FVM)

This model uses the actual cashflows of ETH to value Ethereum

How to Use The Fundamental Value Model (FVM)


Whenever price goes below the green line (the minimum fair value of ETH based on its last 12 months of cash flows), you acquire more of it.

The green line is the last year of ETH revenues x 100. Since 100% of revenues will soon be cash flows to holders, this effectively represents a PE of 100, which is quite low for an asset that has grown its revenues so much.

The yellow line is the price floor. It’s calculated by using the last 365 days of Ethereum transaction revenues and multiplying them by 60. In the entire 6 year history of Ethereum, the price of Ether has only once fallen below the price floor -- in December 2018 -- and only for 3 weeks. If the price ever goes near or below the price floor, you buy it up like crazy.

Whenever the price goes near or above the red line (the maximum fair value of ETH based on its last 12 months of cash flows), you de-risk, pay down any loans, and move a portion of your portfolio to stablecoins (USDC or USDT) in order to be ready to buy the next dip. There will always be another dip to buy.

And if the price ever gets near or above the blue line, you exit around half of your position and wait for the price of ETH to come back down to a reasonable level to buy back in.

  • Yellow Line = 60 Price to Earnings Ratio
  • Green Line = 100 Price to Earnings Ratio
  • Red Line = 140 Price to Earnings Ratio
  • Blue Line = 200 Price to Earnings Ratio

Ethereum Transaction Value Model (TVM)

This model uses the actual transaction fees of ETH to value Ethereum

How to Use The Ethereum Transaction Value Model (TVM)


The yellow and pink lines are the price floors for the asset, the green line is the “fair price” and the red and blue lines are the price ceiling.

  • Blue line - Transaction Revenue Price ceiling - 200x the last 365 days of transaction revenue for Ethereum
  • Red Line - Transaction Value Price Ceiling - 45x the last 60 days of transaction value for Ethereum
  • Green Line - Fair Value - 100x the last 12 months of transaction revenue for Ethereum
  • Yellow Line - Transaction Value Price Floor - 12x the last 30 days of transaction value for Ethereum
  • Pink Line - Realized price. The average buy price for those currently holding ETH. Acts as a price floor in most instances.