|
9 metrics that every crypto investor must know
If you are serious about crypto investing, then these are the nine metrics that you absolutely must know about:
|
|
1. Circulating supply
|
|
|
2. Maximum supply
|
|
|
3. Total supply
|
|
|
4. Market capitalization
|
|
|
5. Fully diluted market capitalization
|
|
|
6. Volume
|
|
|
7. Velocity
|
|
|
8. Price highs and lows
|
|
|
9. Holders’ statistics
|
Note: Numbers quoted are as of 11 July
1. Circulating supply
This is the number of coins that are circulating in the crypto market and are in public hands.
For Bitcoin (BTC), this figure increases every few minutes as new bitcoins are generated with every block that is mined.
2. Maximum supply
This is the maximum number of coins that will ever exist in the lifetime of the crypto.
The maximum supply of some cryptos is:
|
|
|
Bitcoin (BTC): 21 million
|
|
|
|
Cardano (ADA): 45 billion
|
|
|
|
Ether (ETH): Unlimited
|
Yes, you read that right! An unlimited number of ETH can be issued.
3. Total supply
This is the number of coins that have been already created, minus coins that have been “burned”.
In the case of Bitcoin (BTC), the circulating supply is equal to the total supply. SHIBA INU (SHIB) has a total supply of 1 quadrillion. That’s one followed by 15 zeros!
4. Market capitalization
This is the total market value of a crypto’s circulating supply.
Market Capitalization = Circulating Supply x Current Price
Bitcoin (BTC) has always had the highest market capitalization, and Ethereum the second highest in the history of cryptos.
5. Fully diluted market capitalization (FDMC)
This is the market capitalization if the maximum supply is in circulation.
FDMC = Price x Max Supply
If the maximum supply is unknown or unlimited, then:
FDMC = Price x Total Supply.
If the maximum supply and total supply are both unlimited, then we can’t calculate the FDMC.
6. Volume
This measures how much crypto was traded in a specific time, usually 24 hours or seven days.
7. Velocity
Crypto velocity ratio or velocity is the number you get when you divide the 24-hour volume by its / market capitalization.
Velocity = Volume / Market Capitalization
I recommend that this ratio be used to determine if particular crypto is a “currency” or not. Crypto that is used as a medium of exchange will have a higher velocity. Let’s take some examples:
|
|
|
USDT: 0.5757
|
|
|
|
ETC: 0.3112
|
|
|
|
LTC: 0.1376
|
|
|
|
XRP: 0.05279
|
|
|
|
XMR: 0.04011
|
|
|
|
BTC: 0.03258
|
The numbers above speak for themselves. A stablecoin like USDT has a very high velocity and is used as a medium of exchange. That’s one of the most important use cases for stablecoins.
Bitcoin’s velocity is comparatively very low, and this kind of proves that Bitcoin is more a store of value and not a medium of exchange or currency as feared by most governments.
8. Highs and lows
Many people don’t know that BTC is not always the most expensive crypto. It has been overtaken at times by yearn.finance (YFI).
Apart from all-time-high (ATH) and all-time-low (ATL) prices, the following high and low price related metrics are important: 24 hours, seven days, 30 days, 90 days, and 52 weeks.
9. Holders’ statistics
In the crypto universe, whales are addresses that own more than 1% of the circulating supply of crypto. Likewise, investors are addresses that own 0.1% to 1% of the circulating supply of crypto.
Some of the important metrics related to holders of crypto are:
|
|
|
The total number of unique addresses that hold assets in the network.
|
|
|
|
Addresses that have been active over the last 24 hours and seven days
|
|
|
|
Transactions carried out by the top addresses by balance
|
|
