What Are the Risks of Over-Reliance on the Terminal Value in a Crypto DCF Model?

Over-reliance on terminal value (TV) is risky because the TV often accounts for a disproportionately large percentage (sometimes over 70%) of the total intrinsic value in a DCF model. Since the TV calculation relies on highly speculative assumptions, such as the perpetual growth rate or the exit multiple, small changes in these inputs can drastically alter the final valuation.

This high sensitivity means the valuation is more a reflection of the assumed long-term inputs than the short-term forecast.