Some of the beginners in the crypto market are discouraged because they can't afford a whole Bitcoin. Should investors be discouraged or even "cheap" Coins to buy?Dr. Philipp Giese
15. September 2019BTC$10.299,42 -0.04%part Facebook Twitter LinkedIn xing mail
In the last year, we wrote about penny stocks in the crypto-market. Just those currencies by the end of 2017/beginning of 2018, the Crypto first met, hoped for price Shitcoins values of a large return. At the time, such investors had the right, of course. Within a week cheap "crypto-currencies gains were able to capture" the 200 per cent. Alone a glance at the development of the Bitcoin dominance shows that this hope has been dashed up to date (here on the example of the Cryptocap calculated values shown):
the Chart was created with trading view.
Nevertheless, there are still a few that put their hope in the "cheap Coins". On the Basis of emotional arguments, the above-described hope is understandable: It feels "more", if you have as an Investor is 1,000 tokens instead of a fraction of a bitcoin, as well as, most recently, Friedemann Sayaka Sugiyama-Unger aptly illustrated.Shitcoins: From the point of view of the Bitcoin Price Equivalence "worth it"...
Also on the classic market, such a behavior is well known. Some investors prefer to invest in silver as in Gold. Finally, an ounce of silver costs only 18 dollars, while investors have to pay for an ounce of Gold is currently just under 1,500 US dollars. Now that Gold is rarer than silver. On one extreme, investors could invest otherwise, in copper or aluminum. This idea can be transferred to crypto-currencies. In the above-mentioned article is talking about the Bitcoin Price Equivalence. Reminder: The Bitcoin Price Equivalence or, in short, BPE would like to take into account the Supply of different crypto-currencies. The formula is quite simple:[view] Bitcoin, Ethereum, Ripple, IOTA, and the most well-known crypto-currencies on eToro trade. Why eToro? Free Demo account Mobile Trading App; payments by PayPal; a wide selection of various financial products (crypto-currencies, stocks, commodities, ETFs, foreign exchange, indices); Social Trading with a big international Community.
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BPE(x) = rate(x) * supply(x)/supply(Bitcoin)
It is, therefore, a measure which would estimate how much money needs to invest, an Investor in a crypto-currency, in order to receive the same share of the total supply of a crypto-currency, he would receive with the purchase of the Bitcoins of all Bitcoins. If you look at the current Top 10 of crypto-currencies is Bitcoin, without a doubt, is still "on":
You can't see, however, that the courses differ so dramatically from Bitcoin. In particular, in the case of XRP that is interesting: Even when the XRP exchange rate 0.25 US-Dollar is currently very low, the BPE after all, a whopping 607 US dollars. It is not even taken into account once the total Supply of Ripple.... how is it with the usability and acceptance?
Certainly could currencies in the amount of Crypto in fact, with an extremely good Bitcoin Price Equivalence to find. We could even be more absurd and a new Shitcoin with a very low Supply create. The 42-Coin does exactly that: It takes 42 Coins to exist only. With a current price of 22.190 US dollars this corresponds to a Bitcoin Price Equivalence of a manageable $ 0.05.
Now, the 42-Coin is not really useful. An Investment approach is, therefore, to take the Use Case of a crypto-currency under the microscope. As you can see, with a view to the world of Decentralized Finance, in Ethereum large application potential as the #defi underlying Protocol. Ryan Sean Adams has recently described in a Twitter Thread the role Ethereums in the world of MakerDAO, Compound and other #defined applications. He sees in MakerDAOs Stable Coin Dai is an example of a derivative on Ethereum. The value proposition Ethereums he summarizes as follows:
Ethereum is worthy of only one trust value storage on Ethereum... For more trusted derivatives, more Ether is required. So, if the demand for such derivatives grows, the value of Ethereum.
7/ ETH is the only trustless value store on Ethereum
What about DAI? That's stabilized, ETH
So in order for trustless synthetics to grow the value of ETH must grow. By a lot
And if the demand for trustless synthetics grows then the value of ETH will grow. By a lot
— Ryan Sean Adams (@Adams) September 12, 2019
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more importantly, however, the recognition of an asset is. Although you could say that copper or Aluminium can now produce significantly more Use Cases than Gold – Gold as a store of Value, however, can look back on a long history. This is called the Lindy Effect: An Asset with increasing age, more and more, it is proven. Bitcoin may not have on-chain, the skills of some competitors. Its relatively high market penetration, however, shows that Bitcoin has proven itself. Accordingly, an Investment in Bitcoin is worth more than any a new Token, even if this is 0.01 of the US costs a Dollar.don't Invest in Bitcoin, culminating Satoshi's
Such thoughts do not solve the described Problem: A Bitcoin is still quite expensive. Maybe a "small Investor should" change its point of reference. For $ 100, an Investor receives nearly 0.01 BTC. This is however also 10 mBTC (see mili-BTC), or a Million Satoshi. For a Hundred dollars, you will become a millionaire – it's no wonder that the Hashtag #stackingsats on Twitter is booming!