Basic evaluation of cryptocurrencies: Evaluation of true value
Cryptocurrencies such as Bitcoin (BTC) and ETHEREUM (ETH) have been paying considerable attention in recent years due to high investment yields. However, despite their popularity, many investors remain uncertain about the true value of cryptocurrencies. The basic assessment approach can provide a more objective evaluation to the underlying tools of the market.
What is the basic assessment?
The basic assessment is a method used to estimate the internal value of a device, its historical price, based on trends and other external factors. This approach is contrary to technical analysis that focuses on market patterns and trends. In contrast, basic assessment takes into account various factors that can affect the value of the asset.
Key factors for cryptocurrency assessment
There are many key factors when evaluating the true value of cryptocurrencies:
- Supply and Demand : The proportion of buyers and sellers may show that the market is over -purchased or overloaded.
- Market Capitalization : The total value of all outstanding coins that are divided by market capitalization can provide insight into the entire size of the cryptocurrency ecosystem.
- price trends : Cryptocurrencies are known for their high price fluctuations that can be influenced by external factors such as regulatory changes or global economic events.
- Regulatory Environment : Governments and institutions can influence the acceptance and value of cryptocurrencies.
- Network Effects : Cryptocurrency’s network effect suggests that it can attract more users and transactions, leading to increased demand and price.
- Limited Care : Most cryptocurrencies have limited benefits that can contribute to their perceived value.
How to assess cryptocurrency assessment
To assess the true value of cryptocurrencies, consider the following steps:
- Calculate market capitalization : Use reliable sources such as Coinmarketcap or Cryptoslate to determine the market capitalization of each cryptocurrencies.
- Analyze historical damage : Review the price history of the cryptocurrency to identify trends and patterns.
- Evaluate the regulatory environment : Research regulatory updates and changes that may affect the acceptance and value of cryptocurrencies.
- Assess Network Effects : Notice the network effect of the cryptocurrency, including its user base and the amount of transaction.
- Consider the proportion of supply and demand : Analyze the demand and demand ratio to determine whether the market is overloaded or overloaded.
Case Studies:
- Bitcoin (BTC) : In 2017, Bitcoin has experienced significant volatility in China due to regulatory changes. However, market capitalization increased rapidly when institutional investors entered the market.
- ETHEREUM (ETH) : The network effects of Ethereum have increased demand and value over time despite high price fluctuations.
Conclusion
The basic assessment is a more nuanced approach than technical analysis itself. When considering key factors, such as supply and demand, market capitalization and regulatory environment, investors can better understand the true value of cryptocurrencies. Although no factor guarantees investment success, the fundamental evaluation provides a framework for making well -founded decisions in the cryptocurrency market.
Recommendations
- Diversify your portfolio : Distribute your investments to several cryptocurrencies to minimize risk.
- Be informed : You are constantly teaching yourself about market trends and regulatory updates.
- Consider the risk tolerance : Take care of your investment risk -tolerance before investing in cryptocurrencies.