Valuing Cryptocurrencies: Three Easy Pieces

Michael Burda

No 22021, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: Can simple, off-the-shelf models explain positive, persistent, and volatile market valuations of privately issued digital assets? I review †three easy pieces†- models in which cryptocurrencies can serve as a medium of exchange, a vehicle for saving, and a means of overcoming search and matching frictions in conditional payments. Each functionality imparts positive value, yet interferes with the others. Until these features can be separated, their mutual interference seems likely to inhibit widespread adoption of cryptocurrencies as money.

Keywords: Cryptocurrencies; digital assets; Search and matching; Asset pricing; Private money (search for similar items in EconPapers)
Date: 2026-10
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