Home Coins Cardano (ADA) Coin Metrics New Supply Tool Offers Investors Key Insights for Sustained Returns

Coin Metrics New Supply Tool Offers Investors Key Insights for Sustained Returns


Key Takeaways

  • Dubbed Free Float Supply, it aims to help crypto enthusiasts build and design their portfolios, based on improving valuation techniques.
  • Based on the new metric, Huobi Token has one of the highest deflationary policies, which potentially makes it a good long-term investment.
  • Meanwhile, Crypto.com Coin currently has an annual implied inflation rate of 145%.

Share this article

In a move to provide more transparency in a market plagued by obscurity, Coin Metrics developed a new index that dives into the supply dynamics of top cryptocurrencies.

CoinMetric Supply Tool Outlines Long-Term Opportunities

Coin Metrics affirmed in a recent report that strategic stakeholders’ activity within a given cryptocurrency’s network could provide a better understanding of its liquid supply in the market.

Under this premise, the on-chain analytics firm developed a new tool to measure the rate of inflation of multiple digital assets.

Dubbed Free Float Supply, it aims to help crypto enthusiasts build and design their portfolios, based on improving valuation techniques.

“Proof of Work or Proof of Stake blockchains have a rate of inflation from the issuance of tokens to miners/stakers. But what is less understood is the inflation rate of cryptoassets like Stellar, Cardano, XRP, or Chainlink. Whilst these tokens all have fixed or deflationary total on-chain supplies, the transition of restricted assets (such as those held by stakeholders) into the supply available to the market can be perceived as inflation,” reads the report.

Free Gloat Annual Inflation by Coin Metrics
Free Gloat Annual Inflation by Coin Metrics

Some of the most critical outliers out of the cryptocurrencies analyzed by Coin Metrics include Huobi Token, Dogecoin, and Crypto.com Coin.

SIMETRI gains of 751%

The former has the highest deflation rate of 23%, potentially providing a better long-term return than some of the top cryptocurrencies by market cap, including Bitcoin and Ethereum. Huobi Token’s ridiculously low levels of implied inflation are directly related to its periodical token burns.

The Singapore-based cryptocurrency exchange Huobi decided to burn all tokens initially allocated to fund the platform’s operations following a community vote in early March. Nearly 150 million HT were irreversibly destroyed to eliminate them from circulation. This resulted in a dramatic reduction of the free float annual inflation of this cryptocurrency.  

Meanwhile, Dogecoin’s deflation is influenced by the number of addresses that have been “hodling” the altcoin for over five years. Coin Metrics identifies this group of holders as strategic investors, and their tokens are restricted from the liquid supply. 

“In the case of DOGE over the last 12 months, assets that have fallen into this category have been larger than those issued by the mining issuance schedule, thus resulting in a net deflation of Free Float Supply,” said Coin Metrics. 

Dogecoin Hodlers by IntoTheBlock
Dogecoin Hodlers by IntoTheBlock

On the other hand, Crypto.com Coin was deemed as the altcoin with the highest levels of inflation.

Recently, a significant number of these tokens have been put into circulation originating from some of the top founders’ addresses, according to Coin Metrics. The new issuances from these wallets have severely impacted CRO’s inflation levels. 

Cred - earn easier

Crypto.com Coin’s free float annual inflation rate is currently hovering around 145%, which may have severe implications for its future price action.

“The largest team address activity during Q2 was the credit of $67M CRO to Crypto.com Coin team addresses, without which the net value of cryptoassets that moved outside of Company Team controlled addresses would have been $76.5M,” affirmed the on-chain analytics firm.

An Immature Market Where Speculation Reigns

Despite the long-term impact that the circulating supply may have on each of these altcoins, their price action seems to disregard supply and demand laws.

Huobi Token and Dogecoin have generated a year-to-date return of nearly 70% against the U.S. dollar, as of today. However, Crypto.com Coin’s investors have significantly profited as this token has provided returns of more than 400% thus far this year.

Huobi Token, Dogecoin, and Crypto.com Coin on TradingView
Huobi Token, Dogecoin, and Crypto.com Coin on TradingView

While speculation continues to reign the cryptocurrency industry, it seems like any project could trend upwards regardless of ts inflationary policies. But as the market grows and becomes more mature, it is imperative to pay close attention to a token’s fundamental values.

Core principles will define the ability of a cryptocurrency to survive in a space that is about to be heavily regulated since anyone can create their own digital asset.

Share this article



Source link

- Advertisement -
Mr Bitcointe
Mr Bitcointehttps://www.bitcointe.com/
“Fact You Need To Know About Cryptocurrency - The first Bitcoin purchase was for pizza.” ― Mohsin Jameel
474FansLike
76FollowersFollow
4,567FollowersFollow
5,261FollowersFollow
1,583FollowersFollow
2,230SubscribersSubscribe
USD - United States Dollar
EUR
1.17
GBP
1.28
CHF
1.09
NOK
0.11
JPY
0.01
CAD
0.75
AUD
0.72

Most Popular

Introducing the GET Protocol meme competition! | by Olivier Biggs | GET Protocol | Sep, 2020

Who’s got the best meme-brain?Everyone knows you can never have enough memes as a project, so we figured ‘why not set up a...

Austrian gin makers to use blockchain to guarantee bottles’ rarity

The Stin, an Austrian-based gin distiller, is set to use ICON (ICX), South Korea’s largest public blockchain project, to transparently track its supply chain.An...

Bitcoin ATMs Surpass 10,100 Worldwide: Expert Shares Industry Outlook

The bitcoin ATM industry has reached a milestone as the number of machines installed worldwide has surpassed 10,000 after seven years since...

New report says Bitcoin price in ‘more sustainable uptrend’ than 2019

Bitcoin (BTC) hitting its highest in over a year was different from the 2019 bull run because exchange balances fell, a new report says.Published...
bitcoin
Bitcoin (BTC) $ 10,455.64
ethereum
Ethereum (ETH) $ 340.16
ripple
XRP (XRP) $ 0.232036
tether
Tether (USDT) $ 1.00
bitcoin-cash
Bitcoin Cash (BCH) $ 214.38
bitcoin-cash-sv
Bitcoin SV (BSV) $ 145.43
litecoin
Litecoin (LTC) $ 43.64
eos
EOS (EOS) $ 2.54
binancecoin
Binance Coin (BNB) $ 23.97
okb
OKB (OKB) $ 5.93
tezos
Tezos (XTZ) $ 2.12
leo-token
LEO Token (LEO) $ 1.24
cardano
Cardano (ADA) $ 0.081579
monero
Monero (XMR) $ 88.60
stellar
Stellar (XLM) $ 0.070389
chainlink
Chainlink (LINK) $ 8.87
huobi-token
Huobi Token (HT) $ 4.51
tron
TRON (TRX) $ 0.024840
usd-coin
USD Coin (USDC) $ 0.999951
dash
Dash (DASH) $ 67.74
neo
NEO (NEO) $ 19.37
iota
IOTA (MIOTA) $ 0.235852
nem
NEM (XEM) $ 0.105640
zcash
Zcash (ZEC) $ 52.34
maker
Maker (MKR) $ 453.18
paxos-standard
Paxos Standard (PAX) $ 1.00
ethereum-classic
Ethereum Classic (ETC) $ 4.87
vechain
VeChain (VET) $ 0.012576
true-usd
TrueUSD (TUSD) $ 0.999960
ftx-token
FTX Token (FTT) $ 3.61
kucoin-shares
KuCoin Shares (KCS) $ 1.04
waves
Waves (WAVES) $ 2.17