Be Careful About Altcoin Metricsby@MarkHelfman
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Be Careful About Altcoin Metrics

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The article discusses the limitations of traditional metrics in evaluating altcoins in the cryptocurrency market and proposes alternative approaches for making informed investment decisions. It highlights the diversity among altcoins, with varying tokenomics, goals, and use cases, making a single metric insufficient for analysis. For instance, the Fully Diluted Value (FDV) metric is criticized for including tokens that may not exist for years, while Total Value Locked (TVL) is deemed unreliable due to instances of fake and inflated data. The author suggests eschewing market-wide charts like Bitcoin dominance and total altcoin charts, which heavily skew towards larger market cap altcoins. Instead, the article recommends considering different perspectives, such as a modified Bitcoin Dominance chart that excludes Ethereum and stablecoins. The focus shifts to factors beyond price charts, emphasizing the importance of considering rewards from staking, delegating, and other network contributions. The article uses specific examples like CTSI to illustrate how market cap can better reflect real-world consequences of rewards and network growth. It advises investors to prioritize smaller and newer projects, as historical data suggests they often yield higher returns. The author introduces strategic approaches, including a quadrant strategy and portfolio strategy, emphasizing the need for a deep understanding of projects beyond quantitative metrics. Overall, the article encourages investors to go beyond charts and metrics, delve into project details, and engage with communities for a more comprehensive evaluation of altcoins.

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Mark Helfman

Editor, Crypto is Easy newsletter. #1 writer, Medium. Bitcoin author, analyst, commentator.

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