crypto networks and protocols mature, trusted, real-time on-chain data now give market participants a view into the cash flows, active users, user retention, value locked, transaction volumes, and developer activity across a growing set of crypto protocols and applications.

With this comes a new way to research and invest in crypto assets — by leveraging fundamental analysis (that is, measuring the value of a stock by investigating related economic and financial factors). If the past is any indication of the future, we should expect a maturation of crypto markets in the coming years.

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Value Investing & Fundamental Analysis: A Brief History

“In the short run, the market is a voting machine. But in the long-run, the market is a weighing machine.”

So said Benjamin Graham, the pioneer of value investing. Graham’s first book, Security’s Analysis, was published in 1934 — shortly after the Securities Act of 1933 and the Securities Exchange Act of 1934 were established in the aftermath of the stock market collapse and the Great Depression.

Graham’s work helped lay the foundation for fundamental analysis and emerging concepts such as intrinsic value. This work planted the seeds for the market to come to a consensus on the best way to value equities and do a comparative analysis.

These ideas were later popularized by Warren Buffett in the 1950s and 60s after Graham published his second book, The Intelligent Investor. Academic and corporate acceptance further pushed these concepts into mainstream consciousness in the 70s, 80s, and 90s as the market achieved consensus around financial data and core metrics such as price-to-earnings ratio.

“Price to book.” “Dividend yield.” “Debt to equity.” “Free cash flow.” “Return on equity.” “Net margins.” All these concepts came of age in this era. And along with this came investing concepts such as “economic moats,” and “durable competitive advantages.”