cryptocurrency: necessary assessment – assessment of the true value of cryptocurrency
The cryptocurrency market was known for its volatility and unpredictability. As Bitcoin, Ethereum and other Altcoins increased, investors have poured millions of digital assets, hoping that they would quickly achieve profit. However, before investing in cryptocurrencies or buying any cryptocurrency, it is necessary to consider their main value. In this article, we will delve into the concept of the necessary assessment and examine how it is used in cryptocurrency.
What is the necessary assessment?
The main assessment is the analytical approach, in which the emphasis is placed on the basics of cryptocurrencies, such as market capitalization, income flows, consumer base, percentage of adoption and technical specifications. This helps investors understand whether the assets are underestimated or overestimated on the basis of these basic indicators.
Traditional assessment method
Traditional financial markets are highly dependent on assessment coefficients, such as the price and income ratio (p/e) to determine the value of assets. For example, if the company’s market capitalization is $ 100 billion and earns $ 10 billion, its p/e indicator is $ 1000. This approach, however, may not reflect the true value of the properties thoroughly.
unique cryptocurrency properties
Unlike traditional resources, cryptocurrencies have unique properties that hinder the analysis using traditional assessment methods:
* liquidity : cryptocurrencies have a particularly high liquidity, which allows investors to buy and sell quickly. This liquidity can lead to quick price fluctuations, which makes it difficult to determine the value of the property.
* variability : cryptocurrency prices are loud, and daily price fluctuations often exceed 10-20% per day. This variability makes it difficult to predict future results and values.
* limited supply : Most of the cryptocurrency supply is limited, which can lead to deficiency and increase demand.
Basic assessment of the main cryptocurrencies
Let’s examine the main assessment of some main cryptocurrencies:
* Bitcoin (BTC) : The largest cryptocurrency is market capitalization worth over $ 2 trillion. His income flows include mining operations and surgery.
+ Price index for income: about 30,000
+ Market capitalization: over 2 trillions USD
* Ethereum (ETH) : As one of the most frequently traded cryptocurrencies, Ethereum has a strong consumer base and significant income flows through operational fees and intelligent implementation of the contract.
+ Price indicator to the market: about 20,000
+ Market capitalization: over $ 150 billion
* Litecoin (LTC)
: When market capitalization is about $ 10 billion, Litecoin is a popular alternative to Bitcoin. His income flows include taxes on blade operators and implementation of smartphones.
+ Price indicator for income: about 1000
Application
Although traditional evaluation methods can provide information on the value of real estate, they may not accurately reflect the true value of cryptocurrencies. The main rating offers a more detailed approach based on the basic bases of cryptocurrencies.
When assessing basic grades, investors should take into account the following:
* Market capitalization
: Higher market capitalization often shows greater liquidity and lower variability.
* Income flows : cryptocurrencies with high flows from operational taxes, intellectual implementation or other sources may be more valuable than people who do not have these income flows.
* Consumer database : A strong consumer base can increase the demand and cryptocurrency price.