[Vlog] Cheap coins? Let's really talk about the "price" of a cryptocurrency
Another early morning, post work-out video (apologies for the sweating). This time I discuss the price of coins.
Shut up and get me some of them 'cheap coins'!
I'm meeting a lot of people that want to discuss the price of cryptocurrencies with me recently. It is great that cryptocurrencies are attracting legions of new converts. And these people are looking beyond bitcoin and to other cryptocurrencies that they can rally behind, believe in and ultimately support (financially and otherwise).
One thing that always comes up is the price. A common thing I hear is, 'Oh, it's less than a dollar, that cheap!' Even though the marketcap is already in the tens of billions, the circulating supply is in the billions and there are billions of more coins ready to be unleashed into the market - and oh, there isn't even a working prototype that we can "kick the tires" of!
Cheatsheet.. kind of
I don't intend to do a 101 of price analysis however some basics you should look out for on a coin beyond price is
- what's the circulating supply?
- what's the marketcap (price * circulating supply)?
- what's the total supply?
- what's the emission rate (rate at which new coins are released into the market)?
- what's the liquidity?
- how does the coin your analysing match up to it's competitors in terms of marketcap?
- what's the current market sentiment towards the coin?
- what's the state of the current market overall?
Back in my day...
A lot of this 'bread-and-butter' analysis was taken as a given a few years back - when you'd first here about a coin via an [ANN] thread on Bitcointalk. It was a prerequisite that the specifications of the coin were laid bare and people would debate them (ad infinitum at times).
However I appreciate there are a lot of new people to the space and navigate a path to useful information about a coin can be difficult. I haven't even touched on the real fundamentals of a coin (it's use-case, the team, the community etc.)
Ask a friend... or not
Often it is easy to say 'screw that' and defer your analysis to a 'face you trust'. Simply go on their picks and recommendations. However the whole point of this technology is that it is trustless and empowering. You should arm yourself with the tools to do your own research and come to your own conclusions on how to invest your time and money.
What I noticed in the last weeks, maybe month, is that many people getting into cryptospace with a couple of hundred Euro's. Over the holidays and new year I've spoken with so many people who made that statement, next to the statement they dont know anything of trading, but trying to play around with a little. In trollboxes at exchanges, I see the same questions over and over again wrt how to transfer money to this and that, how to buy a coin, how to...essentially all the questions you would ask when having no experience at all.
What I think is going on is that the larger volatility is caused by all these newbies who will jump on hypes, and react immediately to the news, whatever news it is. Look at for instance what happened with Ripple, and TRON. TO me, good reasons why Ripple went up, although it is not a decentralised coin, that doesn't really matter IMHO, but they have potential to cut deals with commercial businesses. Than after news that some prospects mentioned is denying it, BAM 40% down. Why? Ripple is still big in the financial world with all there products and therefore the cards the can play are pretty good to get deals with their current customers and others in their business segment.
The real value of a coin is in the end the level of trust we as a collective have that the coin will be relevant in our lives, now and in many years to come. With so many coins and tokens around, it is hard to define that level of trust, the real researchers start looking at how good the blockchain is, what it allows to do, what try to predict what the potential is for future use, and try to base our decisions on that. At least that is what I do. Such evaluation is more like you would evaluate a company to decide if you like to buy their stocks. I do realise that the coin/token itself is not directly linked to the services of and around the blockchain, but indirectly it is. When a blockchain is not able to do certain things, it will very likely not make it in that particular market segment, therefore it will have lower value in our lives for that particular purpose. I think you know what I mean, but still a very simple example. Bitcoin will not make it in the payments market, it is too slow and with the network being this big already and the recent history with all the misalignment between the decision makers (the miners), we cannot expect Bitcoin to become super fast. Therefore this coin could serve as store of value. But the moment some other coins are out there with extreme high level of security, and maybe a better de-centralisation, this could mean even Bitcoin will suffer from that, because we start using some other coin to put our crypto in 'savings'.
I think we will have some turbulent years ahead of us. Many more people will enter cryptospace with their savings, and also traditional financial investors will enter this space more and more, therefore increasing the total crypto marketcap tremendously. But I'm afraid we also will see a higher volatility due to the so many newbie 'traders' who dont know this space at all, and who do not know how to trade, who get scared easily.
Anyway, only time will tell :)
Great video @nanzo-scoop! Solid info :-)
I experience the same thing around me. What does not help is all those Youtube-videos about 'Best 5 coins under $1!' or '7 Cryptos that are still cheap and will go x100!'.
I feel it is everyone's obligation to point out what you point out with this video/post. It is our duty to educate the community. Nobody wins when the sentiment around crypto turns negative because of misinformation.
Thanks for bringing this subject up to your followers. An educated audience will educate their (future) audience :-)
Keep up the good work!
They should be talking about value coins with the most future potential not cheap coins.
Cheap coins could be related with worthlessness which in the end means expensive coins.
Damn, those are some true words! :-)
Your knowledge is amazing @cryptotem
good experience and tactics. Thank you. according to my research, those who follow the 'tron' like the Chinese New desteklicek because you can take a look.
@nanzo-scoop I like your approach to Cryptos. Yes more and more people are coming to people like us to ask questions. I would tell anyone who is NEW to just set UP a Coinbase Account First and then look into STEEMIT. Since the platform we have here is still in it's BETA infancy. Cheers to you as I listen to your video right now.
I learn a lot from your videos. It gets hard to cut through all the nonsense of listening to youtubers who only just started trading the same time we did. It is definitely better to know how everything works and be able to see it for yourself. The more I do that, the more I see who is also doing that and can consider their analysis as part of mine but not the entire thing. All these videos saying Bitcoin is going to the moon. Yea no shit. Everybody knows that. But if you don't know why, you dont know jack. I need some of that 21 million. Everything I do in ALTs is to get more of that.
Yep knowing your journey and motivation in buying any cryptocurrency is important first step. I learned very early doors, there are no experts in trading crypto (it's too early for that)... just people whose advice rings true and those whose doesn't.
Hi there,
I think the main issue with coin recommendations is that the beneficiaries are mainly those people, who wrote the recommendation.
All this "coin of the week" recommendations are for those who want to hold coins for max 2-3 days. Subsequently they fall again :)
I would appreciate a forum, where the people can vote, for those coins they want to have investigated - they crowd never lies :)
This is really a comprehensive cheatsheet for a newbie like me.
The few coins i have bought,i have done it because they are cheap and i had not taken into consideration all these factors.
I know have a check list before i buy and coin even if it is cheap!
Thank you for this.
It’s always the price that people speculate about but it’s also the value and history of the coin . That’s why it’s importsnt to research of each coin before purchasing . What do you think of EOS as an opinion? I bought some at $9
Ps- you were a big inspiration for me to go my first vlog yesterday :D
I think EOS has huge potential... let's hope they deliver as the crypto space is in dire need of more applications like Steemit that people actually use!
Yes - I saw your vlog. I enjoyed it. Look forward to seeing more. Humbled I played a small part. :)
@nanzo-scoop I believe what you have reiterated is especially useful for those who are completely new to cryptocurrency.
All that being said, sometimes valuations of coins just break all logic - look at XRP - high volumes, far more to come to circulation and see the price.
Great post. It is very interesting how many people are entering this space without understanding basic fundamentals. Unfortunately sometimes the only way to learn these lessons is the hard way.
Great post! I see many people looking fot cheap cryptos instead of looking for valuable cryptos. A cheap money with poor value is worthless. An expensive crypto with a great project could be very valuable (especially if you are a holder).
Like Warren Buffet said ''Price is what you pay. Value is what you get.``