Intrinsic Value - what is it in the cryptocurrency market?

Intrinsic Value is the actual value of assets that are used for investing and trading to make a profit.

Active traders and investors who use fairly aggressive trading strategies and use digital coins as the most promising tool are well aware that even within one day, you can go into a financial drawdown several times and create even more profitable transactions. Therefore, understanding the selected asset's real (true, actual) value is not always possible in conditions of high volatility of crypto money and dynamically changing market conditions. The term Intrinsic Value refers to the actual value of various types of digital coins. This concept is applied in the economic sector to cryptocurrencies and other assets (securities, energy resources, precious metals, and even entire companies). However, in cryptocurrency, obtaining real estimates of value is somewhat more difficult due to the decentralization of all processes and the commercial basis of value regulation. This is an important factor for assessing when to sell a particular currency and when to buy.

The essence of the intrinsic value of cryptocurrency

Intrinsic Value, when applied to other assets, is also called fundamental value. But since digital coins have an exclusively virtual digital expression and also take into account the commercial way of regulation, their value is a combination of factors that influence regulation.

These assessment tools include:

  • size of the cryptocurrency community;
  • quality of the code used;
  • trust in project managers and team members;
  • level of external support.

Subjectively, such phenomena as FUD and FOMO are considered, which determine the emotional mood of investors and traders in a given period.

The easiest way to estimate the real value of a cryptocurrency asset

Determining the combination of all conditions and factors that, in one way or another, influence the value of the chosen cryptocurrency is not that difficult. With this method, emotional and abnormal surges, dips, and sharp jumps in price are leveled out. Simply select a period and plot the average price over time to visualize the results. Using the created curve is enough to draw a straight line, which will indicate a rise or fall in price and allow you to determine the real cost better.

The cryptocurrency market is changing dynamically, so traders and investors need to have truly effective tools for a fair assessment of new and traditional assets to make the right decisions and reduce the risks of financial drawdown.