Crypto and digital assets - Valuations

As digital assets continue their journey from the fringes of finance to the regulated mainstream, third party valuation and transaction advisory services are of increasing importance for industry participants, regulators, and investors alike. Our team possesses the skills and tools necessary to navigate the often-esoteric nature of valuing digital assets. In an asset class in which traditional valuation methods can fall short, we can develop comprehensive models tailored to the unique characteristics of cryptocurrencies, digital tokens and digital assets-adjacent businesses.

Digital assets valuations face unique challenges, such as extreme price volatility, inconsistent jurisdictional regulatory oversight, technological and cybersecurity risks, limited historical data, and the speculative nature of many projects. Furthermore, many digital assets are not underpinned by fundamental business models or revenue/cash flow streams, which can make traditional valuation methods and metrics difficult to apply.

We perform independent, transparent and defensible independent valuations for on-chain digital assets and related economic rights, such as native cryptocurrencies, tokens, SAFTs and other forms of deferred compensation, NFTs and tokenized RWAs, in addition to digital asset-adjacent businesses, Web3 intellectual property and other underlying off-chain assets. We can also help clients by providing strategic insights, fairness opinions and tokenomics modelling for M&A, capital raising and treasury decisions. 

We partner with founders and Web3 startups, investors, law firms, VASPs, exchanges, and corporate governance and compliance consultants, to provide valuation advisory and litigation support services. 

We outline our suite of digital asset valuation services below:

• US GAAP-compliant, IFRS-compliant and MiCAR-aligned valuation models for financial reporting purposes, including asset classification advisory, liquidity and market breadth analysis. 
• Accurate and defensible valuations for tax reporting purposes, such as token grants, SAFTs and other deferred compensation instruments that involve token vesting, lock-up restrictions and other provisions. 
• Fairness opinions and valuation support for transaction advisory, such as M&A, token issuance pricing, private token placements, entity structuring (including wallet-to-wallet transfers and entity-to-entity transfers of tokens and IP), and other fundraising activities such as collateral valuations for lending.
• Valuations of digital assets-adjacent and DeFi businesses, RWA tokens and underlying off-chain assets.

When a digital asset lacks a clear market price or a valid comparator, a valuation expert's opinion becomes essential to estimate its value. Even if a token is traded, the fair value or fair market value of the token may be deemed to be lower than its market price. This can be due to low liquidity or transfer restrictions that apply to particular vesting/locked tokens. Price is ultimately an input, whereas value is a conclusion. Our aim is to assist clients in bridging this divide.