Interesting statistics are not difficult to come by when exploring cryptocurrency markets. Although not all statistics make sense at first, they can provide valuable insights. According to CoinFairValue, the following 5 major cryptocurrencies – ranked by ascending price/fair value ratio – are vastly undervalued based on their perceived “fair value”.
How the Fair Value is Determined
Prior to going over the rankings, explaining this perceived fair value rating is in order. The fair value of these assets is based on the current usage of coins, it does not contain any speculation. It uses a rational economic model for currencies, which can be compared to Discounted Cash Flows metrics for stocks.
#5 Bitcoin Cash
It is rather interesting to see how the use of Bitcoin Cash does not necessarily reflect the fair price of this currency. With each individual BCH valued by the market at $451,18, the “fair value” of this asset is $1,091.82. A rather large discrepancy, albeit it is unclear how much the recent network stress test has influenced these findings. BCH Maintains a price/fair value ratio of 0.41.
The year 2018 has not been pleasant for Ethereum price watchers. This asset lost over 85% of its value compared to the all-time high, yet seems to be on the mend. Even so, its fair value is $397.92, whereas the market keeps the price down at $214.53. As such, Ethereum’s price/fair value ratio of 0.54 shows there is a lot of upward momentum left in the tank.
It is safe to say Dash’s recent marketing efforts are starting to pay off. The use of this currency appears to be accelerating, partially thanks to improving merchant integration. With a current market price of $187.77, and a fair value of $266.85, the ratio of 0.7 indicates the year 2018 may end on a high for Dash. Even so, it is still a very long way removed from its all-time high recorded earlier in 218.
The ongoing development for NEO-based dApps and services has been interesting to keep an eye on. The currency also seems to be used regularly, which means its fair value and market price should be closer together than they are right now. NEO’s fair value is calculated to be $25.79, yet the market isn’t willing to pay over $18.23 for it. This price/fair value ratio of 0.71 may undergo some changes in the coming months.
Although it has been somewhat quiet on the Cardano front, a lot of major upgrades are coming in the next client release. This will undoubtedly affect the ratio between its market price – $0.069 – and the perceived fair value of $0.0945. Whether or not the price/fair value ratio of Cardano will go above or below 0.74 in late 2018, remains very difficult to predict at this stage.