Why Is a Zero or Near-Zero Growth Rate Often Preferred for Crypto Terminal Value?
A zero or near-zero growth rate is preferred for crypto terminal value due to the inherent uncertainty and high risk of technology obsolescence in the sector. It is a conservative assumption that mitigates the risk of overvaluation from overly optimistic perpetual growth projections.
This approach acknowledges that while the network may survive, its market share or revenue growth may eventually plateau or decline due to competition or technological shifts.
Glossar
Perpetual Growth
Iteration ⎊ Perpetual growth, within cryptocurrency and derivative markets, signifies a compounding process driven by capital allocation and strategic positioning, rather than a linear progression.
Terminal Value
Valuation ⎊ Terminal Value, within cryptocurrency derivatives and financial modeling, represents the calculated present value of all future free cash flows projected to occur beyond a defined forecast period.