What Is the Role of the Discount Rate in Crypto DCF Valuation?

The discount rate represents the required rate of return for an investor, reflecting the time value of money and the inherent risk of the investment. In crypto DCF, the discount rate is typically very high (often 20% to 50% or more) due to the extreme volatility, regulatory uncertainty, and project-specific risks.

A higher discount rate reduces the present value of future cash flows, providing a more conservative intrinsic value estimate for a high-risk asset.