Investment: Asset manager, financier, and cryptocurrency teacher Alexander Alexandrovich Ryabinin says the investment attractiveness of digital assets can be determined by analyzing inflationary and deflationary processes.
The expert shared his method with the editors of BeInCrypto. If you arent a math head, this might melt your brain. But try to hang in there.
This study shows how the attractiveness of a cryptocurrency can be calculated, thanks to inflationary and deflationary processes.
For this, a coefficient was developed. It is necessary to substitute all the project data into it in order to get the most valid value.
Coefficient:
A+B/(C+D)*(E*F)
Where
A current supply of tokens
B inflation
C current supply of tokens
D staking
E trading volumes within the platform subject to commission
F commission
Perfectly reflects this Biswap idea:
220.490.000+10%/60.000.000+35%*0.005=242,539,000/405.000=598.9
We took the current capitalization of 220,490,000
Added an estimated 10% additional issue
60,000,000 volume of tokens per day
Under 35% you can stake
0.5% of transactions are burned
In the case of the BSV, there are also deflationary measures that can be taken into account in the formula
Sometimes the staking offer is too small to be considered or not at all. Then we use the formula, removing staking.
An example is LRC:
10% apy
70% fee all trade for srakers
10% burn
0.5% fee trade buy and sell
1,374,513,896 circulation supply
240,000,000 volume trade per day
1,200,000 fee a day
840,000 fee for staker a day, 25,200,000 a mouth, 302,400,000 a year
120,000 burn a day, 3,600,000 a mouth, 72,000,000 a year
1,374,513,896/72,000,000 = 19
1,374,513,896/72,000,000+302,400,000=3.6
You can substitute different data. The main thing that must be observed is that inflationary factors are in the first part of the coefficient, and deflationary factors in the second.
Thus, we get a coefficient that reflects the advantage of deflation over inflation. After analyzing the sector (each asset), we can get the average ratio. And due to this, to understand what assets stand out from the sector.
For example, after analyzing the sector of centralized exchanges from the TOP 100, it became clear that the average value is 20.
Here are the rates for the projects:
BNB 20
OKB-15
FTT-17
KCS-20
HT-25
LEO-105
We can conclude that attractive coins for investment will be OKB and FTT, as their ratios are below average. LEO is not an attractive investment. The rest are neutral.
This does not mean that these projects will benefit in the short term. Rather, on the contrary, these coins will quickly give a small profit. So, the LEO coin is growing faster than the rest in the moment. But if you look after a long period of time, then it will lose to investments with a lower coefficient.
This is due to the fact that this coefficient shows how quickly the supply of coins will decrease. Deflation largely reflects supply constraints. But it is worth noting that you cannot rely solely on this coefficient. Since it reflects only the growth / reduction of supply. The demand factor must also be taken into account.
The previous coefficient reflects the internal economics of the project. How will the supply of coins be reflected in a year, for example.
Now, we need to consider the external demand for the coin itself. After all, by combining these 2 indicators, we can understand how attractive the project is for investors and future profitability (at least through a reduction in supply in a year there are 10% fewer coins, demand is good, which means that at least 10% growth can be predicted fundamentally).
So, how do we calculate the second coefficient:
A/B
Where:
A current market supply
B trading volume
For example, lets analyze BSW volume a day:
220.490.000/60.000.000 = 3.5
We do the same with other coins.
GNO
2.579.588/4.535.631 = 0.5
XLM
25,000,000,000/161,474,917 = 1548
RUNE
330.668.061/92.843.985 = 3.5
LRC
1.374.513.896/70.493.337= 194
Based on the analysis, we can conclude that the most interesting coins for investors are GNO, BSW and RUNE.
Now lets analyze for centralized exchanges.
BNB
163.276.974/1.030.589.981 = 0.6
LEO
953.954.130/7.004.759 = 130
FTT
135.473.350/62.725.740 = 2
KCS
98.379.860/4.197.593 = 22
HB
154.409.022/24.103.685 = 7
OKB
60,000,000/9,630,463 = 6
Here we already have 2 FTT and BNB leaders, 2 good indicators from HB and OKB, the rest are outsiders.
As a result, we got 2 good ideas. FTT is low in both ratios and OKB with excellent deflation and strong demand.
You can add a coefficient for summing up the results:
A*B
Where:
A offer coefficient
B demand factor
Then we get:
BNB 20*0.5 = 10
FTT-17*2=34
OKB 15*6 = 90
Due to the large demand, BNB wins. But it is worth noting that the demand is floating, today there is, but not tomorrow. That is, in the short term, this calculation takes place. But in the long run, things can change.
As an example of historical confirmation, we can take the 2021 cycle and CAKE with its excellent deflationary measures. From February to high.
CAKE has more than quadrupled.
The rest of the decentralized exchange market grew by an average of 150%.
The exceptions are LRC and RUNE, which grew about the same. But if you look, their deflationary measures are just as good. LRC 3.9. RUNE 11. And the demand for these coins (volumes) was excellent.
Got something to say about investment in cryptocurrencies or anything else? Write to usor join the discussion in our Telegram channel. You can also catch us on Tik Tok, Facebook, or Twitter.
DisclaimerAll the information contained on our website is published in good faith and for general information purposes only. Any action the reader takes upon the information found on our website is strictly at their own risk.
More here:
Investment: How To Calculate The Attractiveness of a Cryptocurrency - BeInCrypto
- What Meltdown? Crypto Comes Roaring Back in the Philippines. - The New York Times - March 18th, 2024 [March 18th, 2024]
- Chinas cryptocurrency investors made gains of US$1 billion in 2023 - South China Morning Post - March 18th, 2024 [March 18th, 2024]
- 1 Super Cryptocurrency Could Soar to $200,000 by 2025, According to a Wall Street Analyst - The Motley Fool - March 18th, 2024 [March 18th, 2024]
- Cryptocurrency Miners Need to Report their Energy Use - Earthjustice - March 18th, 2024 [March 18th, 2024]
- Understanding the Fundamental Differences Between Cryptocurrency and Fiat Currency - FinSMEs - March 18th, 2024 [March 18th, 2024]
- SOL Flips BNB, Becoming 4th Largest Cryptocurrency as Ethereum Becomes Next Target - CCN.com - March 18th, 2024 [March 18th, 2024]
- Prosecutors seek from 40 to 50 years in prison for Sam Bankman-Fried for cryptocurrency fraud - The Associated Press - March 18th, 2024 [March 18th, 2024]
- Cryptocurrency: 3 Meme Coins That Could 15x This Bull Season - Watcher Guru - March 18th, 2024 [March 18th, 2024]
- Can the Bitcoin surge push India to overcome its cryptocurrency hurdles? - The National - March 18th, 2024 [March 18th, 2024]
- The Ultimate Cryptocurrency to Buy With $1,000 Today - Yahoo Finance - March 18th, 2024 [March 18th, 2024]
- Cryptocurrency laundryman gets hung out to dry - The Register - March 18th, 2024 [March 18th, 2024]
- Bitcoin price predictions: How much more could it rise in 2024? - Euronews - March 18th, 2024 [March 18th, 2024]
- Shiba Inu Is Skyrocketing: Is It a Top Cryptocurrency to Buy Right Now? - Yahoo Finance - March 18th, 2024 [March 18th, 2024]
- 1 Top Cryptocurrency to Buy Before It Soars 1,328%, According to Cathie Wood of Ark Invest - The Motley Fool - March 18th, 2024 [March 18th, 2024]
- The other Bitcoin rally: How scams are cashing in on the cryptocurrency fever - EL PAS USA - March 18th, 2024 [March 18th, 2024]
- Kalshi Prediction Market To Introduce Cryptocurrency Betting (Payouts In USD) - Blockchain Magazine - March 18th, 2024 [March 18th, 2024]
- Bitcoin Hits Record $72,000, Emboldening Crypto Industry - The New York Times - March 18th, 2024 [March 18th, 2024]
- Solana (SOL) Flips BNB to Become 4th Largest Cryptocurrency - Watcher Guru - March 18th, 2024 [March 18th, 2024]
- Predicting which Cryptocurrency will Boom in 2024 - ForexLive - March 18th, 2024 [March 18th, 2024]
- Nigeria's Cryptocurrency Crackdown Will Have Consequences, Experts Say - Voice of America - VOA News - March 18th, 2024 [March 18th, 2024]
- Crypto ETN providers head for UK but urge rethink on retail ban - Financial Times - March 18th, 2024 [March 18th, 2024]
- Trump Signals Positive Stance on Cryptocurrency If Elected to the White House - Yahoo Finance - March 18th, 2024 [March 18th, 2024]
- Bitcoin Bulls vs. Bubble Bears: A Cryptocurrency Clash - Crypto Times - March 18th, 2024 [March 18th, 2024]
- Imprison crypto fraudster Bankman-Fried 40 to 50 years, say feds - New York Daily News - March 18th, 2024 [March 18th, 2024]
- Is This The Best Cryptocurrency to Buy With $1,000? - Analytics Insight - March 18th, 2024 [March 18th, 2024]
- How Immortalboost.com Connects Gamers and Cryptocurrency - TheXboxHub - March 18th, 2024 [March 18th, 2024]
- Avalanche (AVAX) Created Millionaires, Here's The New A.I Exchange Cryptocurrency Predicted Huge Gains In 2024 - Analytics Insight - March 18th, 2024 [March 18th, 2024]
- Solana volume leapfrogs Ethereum as memecoin frenzy seen sending price to $415 - DLNews - March 18th, 2024 [March 18th, 2024]
- Bitcoin alternatives, from Ether to Dogecoin - Quartz - March 18th, 2024 [March 18th, 2024]
- Cryptocurrency Price on March 12: Bitcoin trades near $72,000; Toncoin, Avalanche jump up to 34% - The Economic Times - March 18th, 2024 [March 18th, 2024]
- Cryptocurrency: 3 Coins To Watch Under $1 as Bitcoin Hits $56,000 - Watcher Guru - February 27th, 2024 [February 27th, 2024]
- The Ultimate Cryptocurrency to Buy With $1,000 Today - The Motley Fool - February 27th, 2024 [February 27th, 2024]
- The vast Ponzi scheme that is cryptocurrency - The Pasadena Star-News - February 27th, 2024 [February 27th, 2024]
- Exploring the World of Global Cryptocurrency Exchanges - Indiana Daily Student - February 27th, 2024 [February 27th, 2024]
- Cryptocurrency Prices And News: Bitcoin Price Hits 27-Month High Above $57000 - Investor's Business Daily - February 27th, 2024 [February 27th, 2024]
- 7 Best Cryptocurrency Investing Strategies | Investing | U.S. News - U.S News & World Report Money - February 27th, 2024 [February 27th, 2024]
- Cryptocurrency fraud costs: $1.56 billion in 2023 - Accounting Today - February 27th, 2024 [February 27th, 2024]
- Expanding Horizons: WDC Quantify's 2024 Plan to Revolutionize Cryptocurrency Trading and Investment - Morningstar - February 27th, 2024 [February 27th, 2024]
- BC Court Upholds Temporary Freeze on Cryptocurrency Mining Connections to BC Hydro Grid - BlockTribune - February 27th, 2024 [February 27th, 2024]
- Texas Blockchain Council and Riot Platforms Win Temporary Restraining Order Against DoE Cryptocurrency Mining ... - BlockTribune - February 27th, 2024 [February 27th, 2024]
- Bitcoin price passes $57,000 to hit 2-year high - Quartz - February 27th, 2024 [February 27th, 2024]
- More from Fed's Schmid: Would be a mistake to consider cryptocurrency as a currency - ForexLive - February 27th, 2024 [February 27th, 2024]
- 1 Top Cryptocurrency to Buy Before It Soars 4,500%, According to Cathie Wood's Ark Invest - The Motley Fool - February 27th, 2024 [February 27th, 2024]
- Cryptocurrency: 3 Coins That Could Surge in March - Watcher Guru - February 27th, 2024 [February 27th, 2024]
- Blockchain Unveiled: Beyond Cryptocurrency Lies a World of Opportunity - AutoGPT Official - AutoGPT - February 27th, 2024 [February 27th, 2024]
- Updated Bitcoin prices outlook for 2024 By Investing.com - Investing.com - February 27th, 2024 [February 27th, 2024]
- Suspicious Activity Surrounds BitForex Cryptocurrency Exchange The Merkle News - The Merkle Hash - February 27th, 2024 [February 27th, 2024]
- Donald Trump's Cryptocurrency Portfolio Tops $5M, Thanks to $2.9M in Trump-Branded Tokens Bitcoin News - Bitcoin.com News - February 27th, 2024 [February 27th, 2024]
- Matthew Perry's X account hacked and soliciting cryptocurrency donations through fraudulent site - MSN - February 27th, 2024 [February 27th, 2024]
- Bitcoin: Here's why the flagship cryptocurrency keeps soaring - Cointribune EN - February 27th, 2024 [February 27th, 2024]
- HTX, formerly Huobi, resubmits Hong Kong crypto licence application - South China Morning Post - February 27th, 2024 [February 27th, 2024]
- Cryptocurrency Bitcoin Cash Up More Than 9% In 24 hours By Benzinga - Investing.com UK - February 27th, 2024 [February 27th, 2024]
- Cryptocurrency Litecoin's Price Increased More Than 4% Within 24 hours By Benzinga - Investing.com UK - February 27th, 2024 [February 27th, 2024]
- Revolutionizing Cryptocurrency and Hologram Technology The Innovations of WiMi Hologram Cloud Inc - Best Stocks - February 27th, 2024 [February 27th, 2024]
- 2024 will see the end of the 'no-coiner' crypto sceptics - Euronews - February 27th, 2024 [February 27th, 2024]
- Is Cryptocurrency Like Stocks and Bonds? Courts Move Closer to an Answer. - The New York Times - January 27th, 2024 [January 27th, 2024]
- 1 Unstoppable Cryptocurrency to Buy Before It Soars 1,120%, According to This Wall Street Analyst - Yahoo Finance - January 27th, 2024 [January 27th, 2024]
- Pastor claims God told him to create $3.2M INDX cryptocurrency scheme - USA TODAY - January 27th, 2024 [January 27th, 2024]
- US targets Iraqi airline Fly Baghdad, its CEO and Hamas cryptocurrency financiers for sanctions - The Associated Press - January 27th, 2024 [January 27th, 2024]
- Techbytes: The Security of Cryptocurrency - ABC7 News - January 27th, 2024 [January 27th, 2024]
- $1.7 Billion Stolen in Cryptocurrency Hacks in 2023: Analysis - SecurityWeek - January 27th, 2024 [January 27th, 2024]
- Data Centers, AI, and Cryptocurrency Will Consume 2x Electricity By 2026 - ExtremeTech - January 27th, 2024 [January 27th, 2024]
- Cryptocurrency, AI Electricity Demand Seen Doubling in Three Years - Bloomberg - January 27th, 2024 [January 27th, 2024]
- Stolen Crypto Falls in 2023, but Hacking Remains a Threat - Chainalysis Blog - January 27th, 2024 [January 27th, 2024]
- 1 Unstoppable Cryptocurrency to Buy Before It Soars 1,120%, According to This Wall Street Analyst - The Motley Fool - January 27th, 2024 [January 27th, 2024]
- What are cryptocurrency hedge funds, and how do they work? - Cointelegraph - January 27th, 2024 [January 27th, 2024]
- Cryptocurrency For New Investors To Buy For Quick 10x Profits in 2024 - CoinCodex - January 27th, 2024 [January 27th, 2024]
- U.K. to start work on 'Britcoin' to prepare for cryptocurrency dominated world - MarketWatch - January 27th, 2024 [January 27th, 2024]
- Russia Mulls Cryptocurrency Mining Disconnection Proposal Mining Bitcoin News - Bitcoin.com News - January 27th, 2024 [January 27th, 2024]
- It's a Brave New Digital World: FinCEN and the IRS Now Require the Filing of Form 8300 for the Receipt of Cryptocurrency - The National Law Review - January 27th, 2024 [January 27th, 2024]
- Bitcoin Might Rally to $42,000 If This Rare Bottoming Pattern Validates By U.Today - Investing.com - January 27th, 2024 [January 27th, 2024]
- Cybercriminals stole $1.7 billion from crypto funds in 2023 as attacks proliferated - The Record from Recorded Future News - January 27th, 2024 [January 27th, 2024]
- Phunware adds cryptocurrency expert to board | NASDAQ:PHUN - Proactive Investors USA - January 27th, 2024 [January 27th, 2024]
- Bitcoin - 15 years and counting: Key facts to know about the first cryptocurrency in the world | Mint - Mint - January 27th, 2024 [January 27th, 2024]
- Pastor Accused of Stealing $1.3 Million in Cryptocurrency Scheme Says God Gave Him the Co-Sign - Complex - January 27th, 2024 [January 27th, 2024]
- Pastor Couple Charged with Fraud After Selling Millions in Cryptocurrency - The Roys Report - January 27th, 2024 [January 27th, 2024]
- That new X cryptocurrency? Its a scam. - Security Boulevard - January 27th, 2024 [January 27th, 2024]
- Get Your Free r/CryptoCurrency Moons $MOON Tokens Today: The Wealth Path - Medium - January 27th, 2024 [January 27th, 2024]
- Major 'Secret' of MicroStrategy Revealed by Bitcoiner Samson Mow By U.Today - Investing.com - January 27th, 2024 [January 27th, 2024]
- Palm Coast's Noah Michael Urban, 19, Faces 14 Counts of Cryptocurrency Fraud in Federal Indictment - FlaglerLive.com - January 27th, 2024 [January 27th, 2024]