Why comparing cryptocurrency prices is wrong?

[gokulnk]

In many of my discussions with friend I keep hearing "I only 500USD, I can't buy bitcoin" and "Suggest me an altcoin below 1 USD". I have been explaining time and again why this line of thinking is wrong. So I thought of writing a post so that I can share it next time somebody asks that question. You can read it here https://blog.goodaudience.com/why-comparing-cryptocurrency-prices-is-wrong-2054a9075878

The gist of the post is that you shouldn't compare prices and you should compare market caps. But since Marketcaps are difficult numbers to compare I suggested using Circulation normalised prices. I built a tool which gives me normalised prices of top 100 coins for quick reference. https://dashboards.bitfolio.org/#/normalised-price

https://cdn-images-1.medium.com/max/1000/1*mYAEhO1hB6PnADB5C1hh7Q.png

Would like to know your thoughts.

[1713959529]

1713959529

[1713959529]

1713959529

[1713959529]

1713959529

[1713959529]

1713959529

[1713959529]

1713959529

[shield132]

If your friend has 500$ then yes, he is rigjt, he can't buy bitcoin because it costs more than 6000 usd. Lol, I know what you mean. People usually hope that coins with low price has potential to rise. Wasn't bitcoin under 1 dollar at first?
What's marketcap? It's Price X Number of circulating supply, it's one of the metrics.

[khactan91]

I think at  500$, I should invest in altcoin with great potential top 1 on coinmarketcap. Because every electronic currency goes up from a very low price below $ 1$ is normal

[mk4]

Because every electronic currency goes up from a very low price below $ 1$ is normal

Definitely not. Not all(and even probably majority) of all the coins/tokens aren't guaranteed to go up beyond $1, especially knowing there are tons of coins/tokens out there that has a HUGE circulating supply. Always take circulating supply into account.

[slashz9]

i think that depends not only on marketcap, but in fundamental and techincal analize, because that two factor make the price rise/down.
specially for fundamental they make big impact for influence coin price.

[Indrawan77]

I understand what you mean but most of the traders expert always ask us to find a coin that cheap but got potential, when we calculate profit, we are calculating about the percentage, not the rising value, and usually an expensive coin rising percentage is not too big compare to the cheap coin, and there is chance that people will buy bulk of cheap coins, and that could rise the price quickly

[shulio]

One should compare not just the crypto currency price but also the supply. Currencies with high supply can not reach high prices.

[el kaka22]

The problem with people nowadays who want to invest is that they are looking for quantity and not quality and this would always cloud their judgment.

They believe if they can just put certain amount of money into some altcoins with some very low value, they can just easily turn out to be rich in a short time, just like bitcoin has made some people rich over the years, but that is always a bad mentality to investment. He does not have to buy 1 bitcoin and he could just buy some little, and then put in some few altcoins alongside as the case may be.

[NeuroticFish]

Would like to know your thoughts.

Imho market cap can also be misleading. I mean, let's just think of a token, 10 mil tokens issued, 1$ / token the ICO price.
The white paper looks good, the roadmap looks good, people starts buying. At the ICO end we have 10 mil $ market cap.
But the team is not OK. They pretend for 6-12 months they work, but they never deliver, price falls and falls. Now the market cap becomes 100k$

Or just think of a good project, but a certain exchange was sloppy and that coin was stolen, dumped and price is down. Or a good project in its early days.


Imho for a good investment you need a solid project with a solid team, for which the ICO may not be the best info, for which the market cap is not always the most accurate indicator.

[palle11]

If you can be lucky to get a coin that is cheap with small supply, you are good for a move but be mindful if the coin team is still active.

One should compare not just the crypto currency price but also the supply. Currencies with high supply can not reach high prices.

I have also seen that this is possibly the case. Looking at top coins at the cmc, you hardly see any crossing 1billion.

[hugeblack]

I built a tool which gives me normalized prices of top 100 coins for quick reference.

I did not try your tool but relying on market capacity is stupid, it gives misleading results and does not mean anything.
A few days ago the Ripple rose dramatically above Ether, does that mean anything?
Market capacity is a measure of central markets but does not mean anything; I can create 10 billion of shitcoin and sell it for $ 1. "above bitcoin."

If you want to build a tool, compare the price to something that has a presence and value in itself such as gold, jewelry, and Lamborghini cars.

[Edsemen]

If you can be lucky to get a coin that is cheap with small supply, you are good for a move but be mindful if the coin team is still active.

One should compare not just the crypto currency price but also the supply. Currencies with high supply can not reach high prices.

I have also seen that this is possibly the case. Looking at top coins at the cmc, you hardly see any crossing 1billion.

Higher supply coins was too hard to pump and as per experience with those coin holdings I had nothing pumped up at very high value so far. If there's a cases that some coins to spike that high price, maybe a hype was happening but suddenly that breaks its value temporarily and be back again to normal cheaper value.

[cryptocrusher]

Neither marketcap or prices are the best for comparing cryptocurrencies. What's better is the actual features themselves. Marketcap is often not reflective of development and progress. A coin that raised 100m in ICO will still have a higher marketcap often than one that raised 5m even if the 5m one is better.

[Ranly123]

In many of my discussions with friend I keep hearing "I only 500USD, I can't buy bitcoin" and "Suggest me an altcoin below 1 USD". I have been explaining time and again why this line of thinking is wrong. So I thought of writing a post so that I can share it next time somebody asks that question. You can read it here https://blog.goodaudience.com/why-comparing-cryptocurrency-prices-is-wrong-2054a9075878

The gist of the post is that you shouldn't compare prices and you should compare market caps. But since Marketcaps are difficult numbers to compare I suggested using Circulation normalised prices. I built a tool which gives me normalised prices of top 100 coins for quick reference. https://dashboards.bitfolio.org/#/normalised-price



Would like to know your thoughts.

With $500, he can already buy Bitcoin but now as a whole. Only he can buy partitions of it. Buying in altcoins is also a good decision since altcoins has good potential to grow beyond $1 in the future.

[Reid]

I think at  500$, I should invest in altcoin with great potential top 1 on coinmarketcap. Because every electronic currency goes up from a very low price below $ 1$ is normal

There is one who made the mistake already of not reading the whole post or the reason behind it.

Okay, let us say you bought the cheap coin for a dollar and you got 500 of it by now.
Do you really think it got the potential to go up? It is the same risk as making to every crypto currency. There is not much of a difference.

The real problem is people here who are in a rush to make big profit in a short span of time. I say they want it short with an exaggerated face.

This needs to stop. Bitcoin didnt make it up in just days. It went thru a lot of downfalls.

[chickenado]

If you can be lucky to get a coin that is cheap with small supply, you are good for a move but be mindful if the coin team is still active.

One should compare not just the crypto currency price but also the supply. Currencies with high supply can not reach high prices.

I have also seen that this is possibly the case. Looking at top coins at the cmc, you hardly see any crossing 1billion.

Higher supply coins was too hard to pump and as per experience with those coin holdings I had nothing pumped up at very high value so far. If there's a cases that some coins to spike that high price, maybe a hype was happening but suddenly that breaks its value temporarily and be back again to normal cheaper value.

Actually we can't force the market to be stabilized since the bearish trend still moves aggressively. We might see those prices fluctuations kept behaving like roller coasters, but tries to recover eventually. But the main thing here was those panic sellers were not gaining courage to face the current challenge. Most of these people dump coins without even thinking the negative effects.

[Wiwendefak]

If your friend has 500$ then yes, he is rigjt, he can't buy bitcoin because it costs more than 6000 usd. Lol, I know what you mean. People usually hope that coins with low price have the potential to rise. Wasn't bitcoin under 1 dollar at first?
What's market cap? It's Price X Number of circulating supply, it's one of the metrics.

You are very right here, 500$ can be a good investment if he invests in low price coin! Bitcoin is not an investment coin for everyone. By 500 USD you can't buy even 0.1 BTC where if you go for low price good coin then you may have a good number of coins! There are several low price good coins available in the market! So, your profit is cinfirmed if the market grows again. 

[hispout]

In many of my discussions with friend I keep hearing "I only 500USD, I can't buy bitcoin" and "Suggest me an altcoin below 1 USD". I have been explaining time and again why this line of thinking is wrong. So I thought of writing a post so that I can share it next time somebody asks that question. You can read it here https://blog.goodaudience.com/why-comparing-cryptocurrency-prices-is-wrong-2054a9075878

The gist of the post is that you shouldn't compare prices and you should compare market caps. But since Marketcaps are difficult numbers to compare I suggested using Circulation normalised prices. I built a tool which gives me normalised prices of top 100 coins for quick reference. https://dashboards.bitfolio.org/#/normalised-price



Would like to know your thoughts.

You can not buy Bitcoin with savings of this mentioned amount so you should start with less valuable coins which are here in the crypto market and people are also making money through them. For example you can start buying Litecoin with your savings which will give you more in quantity rather than buying Ethereum will give you least in quantity. Litecoin has potential as well and this suits you well.

[beerlover]

i think that depends not only on marketcap, but in fundamental and techincal analize, because that two factor make the price rise/down.
specially for fundamental they make big impact for influence coin price.

Technical or fundamental analysis will not help someone who is not ready to understand that investing in cryptocurrencies is not just about the numbers but the value in real world that the market they are getting into creates or will have the potential to create in the long run and that is what totally makes it very valuable and be able to sustain its value as time goes on.

People simply pay so much attention to the quantity these days that they discard exactly the potentials within a project before even deciding to invest in it. Most times it is always just better to concentrate on coins with very solid and good projects rather than trying to just pick anything because of its quantity. In the long run, even if smart moneys want to enter a market, they look for market with potentials as long as it is in a dip state, and then they invest.

[tbterryboy]

I think at  500$, I should invest in altcoin with great potential top 1 on coinmarketcap. Because every electronic currency goes up from a very low price below $ 1$ is normal

People need to start understanding that money would not just come from anywhere and however it is, you will still have to be able to have a good product and a proper demand for you to have a sustainable value in the long run for any market. What people are looking for is to get rich overnight, and I am not saying investing in altcoin is bad, but rather than making the quantity of the coin you want to buy a priority, why not make sure that what you are buying is actually worth it.