Been a while since I have created educational pieces, especially with regard to cryptocurrencies, but today I decided I might as well create one. This particular one isn't centred around the hive blockchain, however, and majorly focuses on the crypto space in general.
Nowadays there's been a lot of new cryptocurrencies being launched every day, even excluding meme coins (of which a lot are a cancer to the space, but that's a story for another day). Some of these new coins are often anticipated by a lot of people in the space (hivers included) majorly because they participated in an airdrop and are expecting to be rewarded for doing some tasks. Some of these drops end up paying a very decent amount of money for the time spent and some give peanuts (dust) to the airdrop participants. I participate in some of these drops and previously I shared how I choose the ones I end up giving my time to here (I got decent rewards from $GMRX,$CLOUD, $EESEE, $NOT, $DOGS, $CATI, and some others, so I guess I must be doing something right) so I won't be going over that, what I'll be going over though is how to predict the price of these assets ahead of time.
A lot of people see their allocations and they start to have unrealistic expectations when they can easily do some simple maths and figure out a reasonable range. This maths is simple and it works for any cryptocurrency.
Price = Market cap / Circulating supply
Stick with me now, this this is easy
Circulating supply
is simply the amount that will be available on the market when it launches. This is different from total supply as some projects like to lock up their tokens. You can find this information on the project tokenomics which they'll release before launch.
Here's where the prediction takes place
Market cap
This is simply the total value of the token, or in other words, the money that is put into the token. The market cap is determined by factors like how much the team raised, the investors, and how valuable the token is perceived. Basically, this is the part you're doing the guessing. But guessing this one isn't hard. All you need to do is go through the starting market cap of other projects that are similar to the one you're doing.
For example, let me show you how I predicted the price of a new token that disappointed people with its launch ($HMSTR).
I looked at 3 projects with a similar profile and their starting market cap.
Notcoin launched with a 1 Billion dollar marketcap
Dogs launched at around 650 million million marketcap
Catizen launched at around 300 million market cap.
So to predict the price of hamster, we look at the possible scenarios
➤ At 1 Billion marketcap that'll be 1 Billion ÷ 64.375 Billion = $0.0155
➤ At 650 million market cap that's 650 million ÷ 64.375 Billion = $0.0101
➤ At 300 million market cap that's 300 million ÷ 64.375 Billion = $0.0047
➤ And let's say they surpass everyone's expectation and do two times Notcoin 2 Billion ÷ 64.375 Billion = $0.031
So with that, we can expect hamster to launch between $0.031 - 0.0047
If you'll check you'll see I was spot on. I had conviction they couldn't even do up to Notcoin and I was right. Which is why when some were still having hope I already knew what was coming.
Anyway, I hope you find this blog helpful and from now on you don't go around having unrealistic hopes when a new token you hold is launching.
THANKS FOR READING
Cover Image created by me using Leonardo AI, and edited
Posted Using InLeo Alpha
