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.