What are the factors that reflect most of your stature? The cars you own, the properties you hold, how much money you hold in shares, how much you spend on yourself, composite worth of the firms you own, and many more. These are the metrics that define your worth, and also, in a subtle way, how safe it would be to make an investment in one of your firms.
Similarly, cryptocurrencies also have definite factors that project their current market condition, and envision how profitable it would be if you invest money in them. Such factors are called ‘Crypto Metrics’.
There are numerous crypto metrics that exist, but some of the major ones are:
24-hour Trading Volume
There is a reason why this metric is being discussed first. 24-hour Trading Volume reflects how much a cryptocurrency is in demand at any given point in time. Another way to say it would be that it exhibits how dynamic the market is for a particular cryptocurrency.
To know how much people have traded a cryptocurrency in the last 24 hours on a single or group of exchanges, make sure you take a glance at its 24-hour Trading Volume.
Market Capitalization represents the total market value of a cryptocurrency. It is the product of a total number of a particular cryptocurrencies circulating supply and its current market price. Higher the market capitalization, higher the value of a company in the market. A generic sentiment in the market is that investors prefer investing in a company with a higher value in the market.
An approximate number of a coin or token released by its company in the market is called the circulating supply. Cryptocurrencies are generally released in the market during ICOs. A cryptocurrency with a lesser number of circulating units and high popularity is considered a healthy investment as it leads to a good overall growth rate.
The sum of circulating and non-circulating numbers of a cryptocurrency unit is known as Total Supply. It is the total number of cryptocurrency units that exist at present. You can estimate the growth of a cryptocurrency in coming years by the number of tokens yet to be released in the market. But that is not the only way to figure that out, as the demand of that particular token in the present and future, also plays a huge role in the same.
Max Supply justifies what it says; the maximum number of a cryptocurrency unit that will ever exist. In the present day, blockchain companies keep a reserved number of tokens to be released in the future, in order to control the demand and supply of their cryptocurrency in the future.
Price Volatility can be observed through price graphs available on many informative websites built around crypto. The need to check price volatility makes sense as investing in a cryptocurrency that fluctuates too much in a short period of time may not be a very good idea. In fact, the concept of stable coins like USDT, the value of which is linked to a stable asset like a fiat currency or commodity like Gold, have flourished in recent days, with an aim to exclude volatility issues from the concept of cryptocurrencies.
Short-term and short-lived, both kinds of growth in the price of a cryptocurrency should not have a deterministic effect on you in terms of investment. If we are talking about long-term investment, you should go with a cryptocurrency, the market for which has seen gradual growth in price, along with the growth in credibility among the masses.