Hi
We know that bitcoin has made an amazing journey from a 50 cents in 2013 to 4000 $ recently.
Bitcoin's story motivates newcomers to look for cheap cryptos selling for a few cents in the expectation that it may repeat a bitcoin story.
The biggest paradox is ripple and I will show you how that even at 21 cents is not a good buy .
To compare apples to apples , I do an analysis of total supply for deciding the true value.
Two considerations are taken for my analysis :-
- Bitcoin total supply (21 mill) is used as the gold standard for comparison . Sorry Ethereum fans !
- Demand and supply forces drive true values. If supply is low it will drive prices up.
For deciding true value of any cryptocurrency , I have devised a multiplication factor ,which is as follows :-
True value multiplication factor (TVMF)
= Supply of cryptocurrency / supply of bitcoin ( 21 million)
For eg , for Litecoin (TVMF)
= 84 mill ( total supply of Litecoin) / 21 mill ( total supply of Bitcoin)
= 4
This means that even if Lite coin becomes as valuable as Bitcoin , its Market Value would not be more than 1/4th of Bitcoin as the supply would always remain 4 X Bitcoin.
Hence at 50 $ (approx)at current market value , Litecoins' True Value would be = 50$ x 4 = 200 $
This make a cryptocurrency like litecoin undervalued at almost 200/4000 = 1/20 th of Bitcoin prices.
This is only an example and you can do analysis on your favourite currency .
Using the same reasoning on Ripple , considering 99,994,523,265 as the total supply or 100 billion approximately
TVMF =100 billion ( total supply of ripple ) / 21 mill ( total supply of BTC)
= 4761 .
Hence at 0.21$ as per current market value , Ripples' True Value would be
= $0.21 x 4 761
= 1000 $.
which is almost 1/4 th of bitcoins price !
This is the reason ripple remains in a range bound price of $0.20 to $.40 and would never make you rich !
Now do you find ripple as cheap ?????
Do your own analysis on your favourite cryptocurrency by using :-
https://coinmarketcap.com/currencies
All are welcome to share their views and suggest some good buys with this analysis !