Grayscale Says Many Crypto Projects Are Undervalued

Grayscale Investments believes that many cryptocurrency projects generating substantial revenue are currently trading below their fair value. According to the asset manager, this could change if the CLARITY Act is passed in the United States, as the proposed legislation aims to establish clearer regulatory rules for the crypto industry.

In a report published on June 24, Grayscale analyzed the 15 largest blockchain protocols by revenue, using data from DeFiLlama, Artemis, and its own research. The company found that many of these projects are trading at relatively low valuation multiples compared to the revenue they generate, potentially offering attractive opportunities for investors who focus on fundamentals.

Hyperliquid ranked first in the analysis, generating $871 million in revenue over the past 12 months. With a market capitalization of $13.46 billion, it was valued at roughly 15 times annual revenue. Pump.fun came in second with $459 million in revenue and a valuation close to 1x revenue, while PancakeSwap generated $322 million and was also trading at around 1x revenue.

Other notable projects included Sky, which reported $248 million in revenue and traded at a 5x multiple, Jupiter with $130 million and 6x, Aave with $125 million and 9x, Aerodrome with $124 million and 4x, World Liberty Financial with $105 million and 17x, Lido Finance with $77 million and 3x, and Meteora with $62 million, also valued at approximately 1x revenue.

Financial applications accounted for 11 of the 15 protocols included in the report. This group also featured Lighter, Uniswap, and Raydium. Among them, Uniswap had the highest valuation multiple, with a market capitalization of $1.78 billion and annual revenue of $49 million, resulting in a 37x revenue multiple. Chainlink was excluded from the analysis because its revenue comes from both on-chain and off-chain operations.

Grayscale argues that the passage of the CLARITY Act could boost blockchain network activity and accelerate the adoption of tokenized assets. Zach Pandl, the firm's Head of Research, believes the legislation could be approved as early as next month.

The company also notes that its report represents its own analysis and should not be interpreted as a guarantee of future returns. Even projects considered undervalued may lose value, and investors should always conduct their own research rather than relying solely on a single report.