Decoding Crypto Pricing
Insights for Institutional Investors
As digital assets have gained popularity as an investment class, the need for reliable pricing methodologies has become increasingly important. Regulatory guidelines mandate that digital assets follow fair value accounting principles, requiring a valuation methodology that reflects the salability of assets on the specified measurement date. In response to these emerging regulatory guidelines, Coin Metrics has developed the principal market price (PMP), a pricing methodology designed to provide reliable valuations that meet the FASB’s guidelines for fair value accounting.
Decoding Crypto Pricing
Insights for Institutional Investors
A price is one of the most basic data points of any functioning, active market. Digital assets are traded around the clock, 24 hours a day, 7 days a week, and 365 days a year. These assets are well-known for their volatility, which can sometimes lead to material deviations among the prices observed for even a single asset’s market prices. Consequently, a seemingly simple question such as: What is the current price of bitcoin?—can be unexpectedly challenging to answer.
