ICO, TVL, Market Capitalization

“Crypto boom or bust? Understand ICOS, TVL and market capitalization”

The cryptocurrency world has gone a long way since its establishment in 2009. From Bitcoin to Ethereum, Altcoins and even some newer chips such as Cardan and Polkadot, the landscape is constantly evolving. However, with great power, there is a great deal of uncertainty, and one thing investors want to understand is how the cryptocurrencies value.

What is ICO?

The initial coin proposal (ICO) is a way to raise funds from investors in developing and distributing digital chips for new cryptocurrency projects. This is like an IPO (initial public offer), but with a much smaller scale. The ICO project creates an access key that represents the ownership of the basic technology or product and then releases these tokens to investors in exchange for their investment.

TVL: The value of the surveillance token

The Tasken value (TVL) measures the total value of all unpaid digital assets on the blockchain network. This is an essential metric to understand the overall potential of the health and growth of the cryptocurrency project. TML is calculated by adding the total value of each token, including those that are still in circulation, and those that have been sold or traded.

Market capitalization

Market capitalization (MC) measures the total value of all unpaid shares of the company. This is a widely used indicator to evaluate the financial health of the company and market results. In cryptocurrency space, MC is often compared to traditional asset classes such as stock.

ICOS: Bunk Sword?

Although ICO was considered an interesting way to raise funds for new projects, some investors are increasingly concerned about their potential impact on the wider market. That’s why:

* Screams and fakes: There are so many new projects every day, it is not uncommon for you to face fraud or fake ICOs.

* Too much saturation: In recent years, the ICO number has increased exponentially, resulting in chips on the market. This can cause excess supply and reduce the value of existing investors.

* Regulation uncertainty:

Governments begin to pay attention to the rise of cryptocurrencies and their potential effects on traditional rhinths.

TVL: A growing trend?

Although the TVL is still relatively small compared to other assets, such as shares or real estate, its growth rate was impressive. In 2020 alone, TML increased by more than 500%compared to previous years.

* Growth pace: Average of all cryptocurrency TML according to Binance coin standard (BCS) is now more than $ 100 billion.

* Investors’ confidence: Because investors prefer cryptocurrencies and ICOs, they want to invest in new projects.

Market capitalization: balanced image

MC can be useful in metrics to assess the overall health of the cryptocurrency project. However, it is important to consider other factors such as TML and investor mood before making investment decisions.

* sentiment analysis: Positive MC trend does not necessarily mean the strong main assets market.

* Competition: The cryptocurrency market is very competitive as many projects seek attention and investor attention.

In conclusion, while ICOs may be interesting and innovative ways of raising new projects to raise funds, it is necessary to apply carefully. In recent years, TML has shown significant growth, but MC remains an essential metric that should be taken into account when evaluating the overall health of the cryptocurrency project.

Investors should also take steps to mitigate potential risks such as fraud, fatigue and regulatory uncertainty. The cryptocurrency market continues to develop, and it is very important for investors to remain informed and customized. By doing so, they can make more reasonable decisions and navigate the complexity of this rapidly changing space.