I believe everyone in Binance Square is here with a purpose - to make money.
Facing such large fluctuations, with prices rising today and falling tomorrow, in a market with casual fluctuations of more than 10%, how can one accumulate wealth in the crypto world?
What exactly causes the price of a cryptocurrency to rise and fall? Please allow me to share my own simplistic alternative viewpoint.
Overall basis for judging cryptocurrency value:
Scarcity: For example, Bitcoin has a fixed total supply, and the deflationary model supports its value.
Practicality: Does the token have real application scenarios? For example, Ethereum serves as ecological fuel, with essential demand driving its value.
Technical Foundation: The security of the blockchain, transaction efficiency, and degree of decentralization constitute the value base.
Community Consensus: The number of users and the activity level of developers reflect market recognition.
Personal Analysis:
As the number one in the crypto world, Bitcoin can now be bought in increments as small as 0.0001, so whether one issues one token or 100 billion tokens, aside from emotional feelings, there is no contribution to value.
Platform tokens and fuel tokens are comparatively more worthy of attention, influenced by policy and institutions, and can be used in real banks or other trading systems, hence holding greater value.
Large exchanges can also face crises, newly launched chains can experience hacker attacks, and the technical foundation has a negligible impact on prices.
Pure developers and supporters may become self-absorbed; of course, high activity means developers are invested, similar to sufficient PR and promotional expenses, indicating that developers care more.
Summary:
From a value perspective, cryptocurrencies do have some new and good value foundations, but through the above personal analysis, these characteristics cannot be equated to products in the real economy or corresponding financial products. When you buy a banana, you can eat it; when you buy a stock, it represents a series of data reflecting the operations of the underlying company's products. There is at least some correlation between price and value. The overall price volatility of cryptocurrencies is more about the game between buyers and sellers; when buying increases, prices rise, and when selling increases, prices fall. The financial attributes far exceed the fundamental value of the tokens, which is why large institutions are now rushing to enter and build reserves in various currencies.
So how do we survive and thrive in this market? I hope everyone can share experiences, like, comment, and forward. More communication and understanding different worldviews and perspectives is key to expanding our horizons. People can never earn money beyond their understanding, so I hope we can together open the door to the world of knowledge.
