Definition ∞ Price to Fair Value is a valuation metric that compares a digital asset’s current market price to its estimated intrinsic worth. This intrinsic worth is typically derived through fundamental analysis or economic modeling. It helps assess an asset’s true economic standing.
Context ∞ Investors frequently employ the price to fair value metric to ascertain whether a digital asset is overvalued or undervalued in the market. This assessment aids in making informed investment decisions and formulating strategic portfolio allocations. It remains a crucial tool for long-term investors in volatile cryptocurrency markets.
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