cryptoassets
The best thing about this book, according to reviewers online, is its comprehensive coverage of various cryptoassets, making it a valuable resource for both beginners and experienced investors. Reviewers appreciate the clear explanations and practical insights provided throughout the text. On the other hand, the worst aspect highlighted by some reviewers is that the book can become outdated quickly due to the rapidly changing nature of the cryptocurrency market. Some readers felt that certain sections lacked depth or failed to address emerging trends effectively.
Key Insights
- Cryptoassets as a new asset class with distinct subtypes. Burniske and Tatar distinguish cryptocurrencies (store of value / medium of exchange), cryptocommodities (computational resources like Ethereum’s gas), and cryptotokens (access rights to a specific application or protocol). Treating all crypto as the same is like treating all securities as the same — the risk profiles and investment theses are different.
- Applying traditional asset allocation frameworks to crypto. The book applies Modern Portfolio Theory to crypto: how does adding a small crypto allocation affect risk-adjusted returns in a diversified portfolio? Because crypto has historically had low correlation with traditional assets, even small allocations improved Sharpe ratios — though the volatility and tail risk are extreme.
- The DARP framework for evaluating cryptoassets. Burniske’s Cryptoasset Ratio of Power (DARP) — an adaptation of traditional valuation multiples — attempts to assess whether a cryptoasset’s current price is justified by its current utility (transaction volume, usage). The framework is a useful mental model even if the specific metrics have evolved.
- Network value as the key metric, not price. For cryptocurrencies, market cap (network value) is more meaningful than unit price. Metcalfe’s Law — network value grows with the square of connected users — provides a theoretical basis for why adoption curves matter more than any near-term price signal.
- The importance of understanding the whitepaper before investing. Burniske and Tatar emphasize reading the original protocol documentation before evaluating any cryptoasset — both as diligence and as a framework for assessing whether the team, the technology, and the token economic model are coherent and defensible.
— Drafted from external sources; review and edit to make your own.