Grayscale Research Head: Crypto Protocol P/E Ratios Are Only Single Digits, CLARITY Act Will Unlock Valuation Potential

Grayscale Director of Research Zach Pandl noted that the majority of the top 15 revenue-generating protocols now have price-to-earnings ratios in the single digits. If the CLARITY Act passes, it will further catalyze fundamental valuation recovery.
(Previous context: Grayscale Research Director: If the Fed Holds Steady, Bitcoin Will Match Stock Market Gains)
(Background supplement: JPMorgan: CLARITY Act Legislation Nearing Completion! Controversies Reduced to 2-3 Items, Stablecoin Interest Enters Constructive Dialogue)

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• Top 15 Protocols: Most Have PE Ratios Below 10
• CLARITY Act Adds Fuel: Traditional Financial Rules Enter Crypto
• A Turning Point for Fundamentals

Grayscale Director of Research Zach Pandl noted in a post on the 25th that after a prolonged bear market, most blockchain applications generating revenue appear quite attractive from a fundamental valuation perspective. Among the top 15 on-chain applications ranked by protocol revenue, most price-to-earnings ratios have fallen to single digits.

Top 15 Protocols: Most Have PE Ratios Below 10

The Grayscale investment team examined the top 15 on-chain applications (including Hyperliquid) by protocol revenue based on trailing 12-month data, finding that most currently trade in the single-digit multiple range. Given the low operating costs of these protocols, valuations also appear cheap when measured by earnings or cash flow.

This means fundamental investors can gain exposure to crypto assets that generate steady revenue at a relatively low cost.

CLARITY Act Adds Fuel: Traditional Financial Rules Enter Crypto

Pandl emphasized that the CLARITY Act, which could pass as early as next month, may act as a catalyst. If enacted, the bill would introduce traditional financial rules to crypto assets, driving growth in tokenized assets and on-chain finance.

Nearly all of the top 15 revenue-generating protocols are closely tied to financial use cases or staking infrastructure, and Pandl believes these protocols will benefit significantly from the expected growth in on-chain transaction volumes.

A Turning Point for Fundamentals

This round of valuation compression reflects a shift in the crypto market from "narrative-driven" to "revenue-driven." Over the past year, the valuation logic for DeFi protocols has moved from TVL (total value locked) to protocol revenue and cash flow, increasingly aligning with traditional financial market valuation frameworks.

For Taiwanese investors, the significance of this shift is that the investment framework for crypto assets is becoming more quantifiable. The old model of FOMO-driven chasing highs is being replaced by fundamental tools such as "price-to-earnings ratios" and "discounted cash flow."