There are well-established ways of valuing stocks in the real world. But is it possible to apply the same metrics to crypto?

A recent Quartz article looks at some of the ways you can value crypto coins. In the traditional economy, analysts use ideas like P/E ratios (how much a stock earns in dividends in proportion to its price) to pick undervalued shares. Of course, that doesn’t work so well in crypto, especially for coins that provide no ongoing revenues (though it might be useful for masternode coins like DASH and CRW).

Read: https://qz.com/1266985/bitcoin-price-how-to-value-bitcoin-and-other-cryptocurrencies-in-theory/

In crypto, any fundamentals tend to be lost against the noise of speculative trading. That is, the real-world value of a coin, as underpinned by actual usage, is a tiny proportion of the value ascribed to it by traders. But there are some broad metrics you can use to compare coins – using these, of course, alongside other indicators such as how large and engaged the community is, how actively the coin is developed, and so on.

One of the simplest indicators is NVT: Network Value to Transactions. The theory is that the value of a network should broadly correlate to its transaction volumes. Willy Woo, who came up with the indicator, has an NVT ratio tracker for bitcoin: http://charts.woobull.com/bitcoin-nvt-ratio/

You can also take a look at the NVT signal, which suggests whether bitcoin is a buy or sell based on its NVT: http://charts.woobull.com/bitcoin-nvt-signal/.

This is not an indicator to use on its own, for various reasons, but it adds some interesting context to the picture for any crypto.

You can compare NVT ratios for different cryptos at https://coinmetrics.io/nvt

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