Cryptocurrency

What is the Value Proposition of Cryptocurrencies | An Expert Guide

Currently, cryptocurrencies are actively working in the economy of most countries in the world. Therefore, it is an accessible investment option. However, the main concern is to know where to invest due to the great diversity of options offered by the market. Moreover, projecting or forecasting the value proposition of cryptocurrencies is a challenge at first sight. For this reason, we will provide you with the necessary information on what is the value proposition of cryptocurrencies to solve this enigma.

Basic and Relevant Information

What is the Value Proposition of Cryptocurrencies

First*88hh, the main characteristic of cryptocurrencies is their technological dependence that allows transactions between two or more. In addition, this is intertwined with hardware, software, and qualified personnel and they move throughout the world. Generating popularity among users raises or lowers its price quotation, creating a supply and demand; based on the principles of economy.

Transactions are captured in a public and distributed ledger, known as blockchain technology, to which anyone can access. Reflecting the movement and creation of cryptocurrencies, their value system is captured with continuous updates. In this way, digital currencies have attracted; large venture capital, imposing an important economic trend.

Retail and wholesale companies with traditional bases in the market have adapted their payment systems to receive cryptocurrencies to support the evolution occurring in the market. In addition, for expanding the payment options; possessed by their new and upcoming customers. Its interconnected and distributed environment allows online business models, enabling a proposal based on cryptocurrencies.

Calculate the Maximum Price of a Cryptocurrency

What is the Value Proposition of Cryptocurrencies

The average calculations; performed in cryptocurrencies are based on dividing the maximum historical capitalization by the supply. In short, it is about calculating the price that a cryptocurrency will obtain if its price reaches its estimated maximum.

These assumptions are purely theoretical. However, they can give an estimate, depending on its market behavior. However, it is impossible to predict with affirmation. For that reason, we will estimate based on several scenarios. Next, we will show several scenarios, where we will make the calculation:

Some Calculations

  • Based on capitalization will reach 10 billion; in 2018, a coin that reaches this value was among the top 20. In addition, if it maintains this sequel to be among the top 5, it must reach a capitalization of 65 billion by 2021. Below is a comparative image:
  • When it reaches a capitalization of 138,932 million, based on Ethereum when it reached it at the end of 2017. Therefore, its average value for 2021; should be divided by the supply of coins available for sale that it owns. In this way, we will show you a statistical evolution chart provided by econolibertad.com:
  • Example of calculation; let’s suppose we have crypto, which by the growing popularity and potential excites us. In 2021 it has a capitalization of 443 million and a supply of 100 million coins.

Having it at 62.8 million since 37 million coins have been sold. If we apply the first case, the coin would cost 159$, dividing 10 billion by 62.8 billion. In the next one, its value would oscillate at $2,212 and in the third one $5,357 if it maintains its trend and reaches a capitalization of 336,433 million capitalizations. This projection would have an average of 3 years, in which, depending on your investment, it should logically generate a considerable income. If the idea is to invest, projecting with calculations, it should be long-term savings capital.

Bottom Line

At this point, we have the necessary information to propose and define the value proposition of cryptocurrencies. This will allow us to project the value of cryptocurrencies, based on their capitalization growth, among their supplies. This provides us with variables and projections, which would influence the decision to invest or not.

Let us remember; that they are projections that depend on ups and downs in the market and a trend marked by the performance; and public acceptance. In this way, we emphasize predicting which cryptocurrency is the one that will generate you high income; it is impossible. With this data, you can only have a favorite in the trading game.

However, it is advisable to use accurate data and monitor several options before deciding to invest in determining which one is increasing in supply and growing in popularity compared to the others. Therefore, carrying out this process is not easy. However, it requires time and desire. In the end, it will give you the best option.