In 2019 the cryptocurrency sector will continue its evolution. While its early years have been dominated by almost entirely speculative trading, as the market matures, a digital asset’s ‘fundamentals’ will become increasingly important as value indicators. BNC’s ‘Alt-Coin Contenders’ series introduces assets with fundamental characteristics that set them apart from their competitors and justify their inclusion in any investor’s ‘ones to watch’ list.
From an investment perspective, valuing businesses is typically done using time honored formulas like price to earnings and price to book ratios, PEG calculations and dividend yields. In the crypto space, none of these methods apply directly — and investors continue to wrestle with how best to assign a value to digital assets in a nascent industry that is sentiment driven and characterized by wild volatility.
To that end, the purpose of this ‘Alt-Coin Contenders’ series is to identify specific assets that BNC analysts have identified as having fundamental characteristics that at the very least, justify investors including them in a ‘ones to watch’ list.
Our selections are made based on a range of criteria – things like the number of Dapps deployed or an increase in on-chain transactions. Or the amount of Github activity and the size and enthusiasm of an asset’s ‘community’. Or apparent liquidity — significant exchange listings and fiat on-ramps. Exposure to potential legislative action is also important, as are the people behind the scenes — inspiring leaders with ‘rock star’ social media status, or alternatively, big-time financial backers with deep pockets and a track record of success. No single asset will tick every box, and some will tick more than others, but what this series aims to do is move readers beyond simplistic FUD, FOMO and speculation — and introduce the range of fundamental token attributes that should become recognized value indicators as the industry matures…
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