Without a doubt, 2022 was a hard year for the crypto industry. The future is unstable and unsure for many projects, but the current state shows positive movements. As a new industry and many rising projects, it is normal to have periods of turbulence and periods of growth. But how exactly crypto prices are evaluated and how do they affect the stability of the industry?
Crypto Market Industry in 2023
One of the major events of 2022 with massive reverberation was the FTX collapse. When we added the drop of LUNA and Terra, plus the situation with Celsius, the crypto scene didn’t look bright. These events proved once again how active the industry is and how fast things change. Only a year ago FTX was among the top organizations, serving as an example of success and creativity, but now it is the opposite.
However, one of the interesting things about crypto is the fact that after every massive failure, usually there is a positive trend bringing even better results compared with before the incident. Another thing is that each mistake motivates the community to revise and analyze its current state and make improvements in order to avoid this again.
Some people believe that if crypto investors are regulated, it will have a positive impact on the whole industry. This is somehow true and it will improve customer protection and market integrity, but scams related problems will still be present. The main points of focus for most crypto players are price, market capitalization, and trading volume, but these factors change the focus of honest crypto traders and make it easier for the bad ones to get involved. By influencing these metrics, it is much easier to attract attention, funds, and investors to scam projects. So, in order to make the industry safer, the community needs to change its focus and not be influenced by these metrics. Instead, the focus should be on the potential, solved problems, and progress.
This problem arose back in the time when altcoins became popular. Many projects were created in order to compete with Bitcoin and many market metrics became important for the evaluation of stability. Because blockchain systems rely on a public ledger where everything is publicly available, therefore all metrics are also publicly visible. This gives an opportunity for many bad players to influence the market and specific metrics in order to popularize their projects and cause their scams.
When they can influence these metrics, the result is creating an environment where it is easy to create any project and make it look like it is successful and worth millions. Usually, this happens when the supply of coins is limited. That is why these metrics should not be viewed as a reliable source for investment, but many investors simply can’t resist the idea that what they see is proof of a positive trend when, in reality, this is not always true. And many times there is no other option – when you have available good numbers and interest rates, it is easy to find more partners that would believe and invest more. This makes many real founders use these tactics in order to attract more attention to their projects. As a result, it became harder to distinguish which projects are actually good investments or scams and simply makes it useless to rely on such metrics.
Because of such movements, crypto prices and coins are a product of other underlying aspects. And due to this scheme crypto enthusiasts can’t focus on the most important problems, but instead, they think about metrics that in the end don’t mean anything. Because of this, we have seen many projects that failed and scammed millions.
How to Evaluate Crypto Prices?
Even though there are some metrics that are not useful, metrics are actually valuable. In fact, metrics are needed in order to evaluate projects and their potential, but only the right ones. Metrics could give directions to projects, give them a reality check, place them among competitors, and set the key points of focus. They can be very important in new industries that are developing, just like the crypto industry. Crypto prices, market capitalization, and trading volume could be valuable metrics once the industry is mature, but in its current state, they create chaos. A very clear example of this is the FXT coin and Terra, which became popular because of a good marketing strategy but died completely later.
So some important metrics to be considered include the actual change each project brings and the type of problems it solves, instead of cryptocurrency prices and volatility. This gives the opportunity to set specific metrics for each project aligned with the problems it solves and predict its future existence and possible impact. One good approach is to compare a new crypto project with its traditional version. For example, a new crypto platform that acts like a bank compared with a traditional bank – what are the advantages, how much, and what exactly customers will gain by choosing the new option? When answering all these questions, a project could prove its worth and make it possible to predict its future.
Once choosing the right metrics and placing the focus right, it could make the crypto industry at the top spot and potentially be mainstream accepted.
Crypto Platforms / Crypto Exchange
No matter what metrics you are following, it is always important to be up to date about the market situation and the price of different coins. The easiest way to do this is by using a good platform where you can analyze and check the trends.
Gate.io cryptocurrency exchange is one of the oldest and safest exchanges in the industry. The platform has more than 1400 coins and many financial services.
Check the latest crypto prices here: https://www.gate.io/price
Conclusion
Crypto prices depend on many different aspects and factors. The current state of the market wrongly makes the majority of investors dependent on the wrong metrics instead of creating the right ones and focusing on them. Once the industry is mature enough, metrics like market capitalization and trading volume could be enough to detect a good project. But until then, industry experts have to create and set a new standard that will eliminate a large number of scams and bad projects.
