Analyst Willy Wu published a thread in which he explained why the fundamental value of the firstcryptocurrencies exceed the market.
According to Wu, one of the fundamental indicators of bitcoin is the NVT [Network Value to Transactions] indicator. It is inversely proportional to the turnover rate of coins in the digital gold blockchain.
The analyst compared the indicator withprice/earnings ratio. It is used to comparatively assess the investment attractiveness of a company. If you multiply the NVT value by the amount of funds moved between investors, you get the market capitalization of the asset.
A thread about NVT, one of the first on-chain signals first published in Feb 2017.
This is a 2021 re-hash of my NVT learnings since then.
«How to use on-chain volume to establish a fundamental valuation for Bitcoin.» pic.twitter.com/m3BHsFx70o
- Willy Woo (@woonomic) June 1, 2021
Wu noted that NVT fluctuates around"imaginary midline". According to him, it is the normal ratio of the asset by which the volume of transactions in the blockchain must be multiplied to obtain a valuation.
If the indicator takes a value below this line, as at the moment, the market underestimates the asset, and vice versa.
NVT oscillates around an imaginary mid-line. That mid-line is in effect the normal ratio that we should multiply volume by to get its valuation. pic.twitter.com/wEQrmTpzc0
- Willy Woo (@woonomic) June 1, 2021
The specialist drew attention to the fact that the NVT chart is “drifting upward”. He attributed this to the growing dominance of cryptocurrency exchanges, as significant volumes of assets move outside the blockchain.
To calculate the fundamental network value [NVT Price], you need to multiply the median value of NVT, taking into account the bias due to the lack of exchange activity, by the volume of transactions in the blockchain.
Putting it all together.We run a 2 year moving median of NVT Ratio, that gets us an estimate of the mid-line value also accounting for the drift upwards due to the missing exchange activity. Multiply this by the on-chain volume, and we get a fundamental network valuation. pic.twitter.com/M2WQtiisLC
- Willy Woo (@woonomic) June 1, 2021
According to the Woobull Charts service, the NVT Price for Bitcoin is estimated at $54,538. At the time of writing, the first cryptocurrency is trading at $37,000.
</p>Recall that in March, Wu said that in 2021, digital gold was expecting the final “explosive bull rally” of three years of growth.
Where is it more profitable to buy bitcoin? TOP-5 exchanges
For a safe and convenient purchase of cryptocurrencies with a minimum commission, we have prepared a rating of the most reliable and popular cryptocurrency exchanges that support deposits and withdrawals of funds inrubles, hryvnias, dollars and euros.
The reliability of the site is primarily determinedtrading volume and number of users. By all key metrics, the largest cryptocurrency exchange in the world is Binance. Binance is also the most popular crypto exchange in Russia and the CIS, since it has the largest cash turnover and supports transfers in rubles from bank cardsVisa / MasterCardand payment systemsQIWI, Advcash, Payeer.
Especially for beginners, we have prepared a detailed guide: How to buy bitcoin on a crypto exchange for rubles?
Rating of cryptocurrency exchanges:
| # | Exchange: | Website: | Rating: |
|---|---|---|---|
| 1 | Binance (Editor's Choice) | https://binance.com | 9.7 |
| 2 | Bybit | https://bybit.com | 7.5 |
| 3 | OKEx | https://okex.com | 7.1 |
| 4 | Exmo | https://exmo.me | 6.9 |
| 5 | Huobi | https://huobi.com | 6.5 |
The criteria by which the rating is set in our rating of crypto-exchanges:
- Work reliability— stability of access to all functions of the platform, including uninterrupted trading, deposits and withdrawals of funds, as well as the duration of the market and daily trading volume.
- Commissions– the amount of commission for trading operations within the platform and withdrawal of assets.
- Feedback and support– we analyze user reviews and the quality of technical support.
- Convenience of the interface– we evaluate the functionality and intuitiveness of the interface, possible errors and failures when working with the exchange.
- Platform Features– availability of additional features — futures, options, staking, etc.
- final grade– the average number of points for all indicators determines the place in the ranking.
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