Learn Fundamental analysis - Dont let a cheap crypto currency fool you if the price is in cents !!

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 :-

1. Bitcoin total supply (21 mill) is used as the gold standard for comparison . Sorry Ethereum fans !
2. 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 !