What Is the Fair Market Value of Cryptocurrency?

 Back to basics. Cypto means hidden. Currency means money. Hidden money. Not exactly what we mean by cryptocurrency, but you get the picture. So let's start with the money part.

There are three requirements for something to be considered money.

1. It's a store of value. People keep money as a way to preserve their ability to buy things in the future. Does crypto meet this requirement? Possibly.
2. It's a unit of account. Does anyway use a crypto coin to keep their books? I highly doubt it. Given the volatility of most coins, it wouldn't make accounting sense.
3. It's a medium of exchange. Is anyone using crypto to buy and sell goods and/or services? I highly doubt it - at least relative to the amount of crypto outstanding. Again, the volatility of if simply makes it too inefficient. Of course, when the normal order of things is already inefficient (for black markets, illegal goods or services, or in countries where the banking system is already horrible), crypto might be MORE efficient than alternatives. 

So in order for crypto to be considered money, it would need to meet all three of the above. It barely meets one. So it isn't money.

What is it? A hot potato. Whoever is able to pass it along to the next person for a profit wins. Whoever can't, loses. In other words, it's a market in pure speculation. It's worse than tulips. Tulips have SOME intrinsic value (they're an actual plant) and even more extrinsic value (we think they're pretty). So the last person to hold a tulip when the bubble popped could at least use it to seed a florist startup and go from there. The last person to hold a crypto coin has nothing at all. 

"But it's the blockchain that's actually valuable." Possibly. If so, invest in the companies that are pioneering that. It's not as if by own a crypto coin you own a share of the patent on blockchains. But even then, most of the companies that have tried blockchain in their accounting have ended up deciding it's no easier/cheaper than the old fashioned way.

In summary, the fair market value of crypto is $0. Anything higher than that is for suckers.