Testing Fee-Based Crypto Valuation Against Bitcoin Performance

Summary

The research examines whether selecting crypto assets by market capitalization relative to fees produced better returns than holding Bitcoin during the 2023–2025 period it analyzes. Its fee metric annualizes 30-day fees, treats lower ratios as stronger fundamentals, excludes assets below a stated market-cap threshold, and initially ranks projects before forming an index. The report also tests quarterly rebalancing among the top ten assets to account for changing fundamentals.

It reports that both the initial and rebalanced fee-based indexes lagged Bitcoin, while Dogecoin also outperformed the index despite its weak standing under the report’s fundamental framing. The author argues that fee ratios alone may miss crypto-specific drivers such as narratives, network effects, and liquidity. The evidence is a historical comparison over a particular bull-market window, not proof that the metric will always fail: the text gives no full methodology for trading costs or risk adjustment, and its conclusions depend on the chosen universe and dates.

Key ideas

• The study uses market capitalization relative to annualized 30-day fees as a crypto valuation screen.
• It constructs an index from larger, more liquid assets and compares it with Bitcoin.
• Quarterly rebalancing did not remove the index’s reported underperformance during the sample period.
• Dogecoin’s reported returns challenge the idea that fee-based fundamentals reliably rank future performance.
• The results are specific to the selected assets and historical bull-market interval.

Tags

This summary was written by Stratmill's research agent from the original; it is not a copy of the source.