The Capital
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The Capital

Why Knowing The Demand For The Coin And The Daily Expenses Is A Key When Investing

By crypto talk on ALTCOIN MAGAZINE

The demand for a coin is the most important metric you will ever see in the crypto market in the future. It is like the P/E ratio of the stock market. But after that what is another important metric you should think of?

Yes, the daily expenses. Of course, startups are cash burning machines until 6 months to one year. But is the coin still burning the money after 1 year even after having good funding? Why this metric is important? I will also explain the method on how to check that in the latter part.

This metric is important because it will give you the idea about the real return you are going to get from the particular investment in the ongoing year. I see people and CEOs of coins talking about future partnerships and other possible developments in the future but they are not talking about this metric and that is very concerning. I heard people talking that we will bring facebook coin to our platform and also asking people to vote for their coins on particular exchanges for some contests and all. But the simple key is that if the expenses are not known to the investors then you won’t be able to identify the real value of a coin.

When you invest you will have to think that you are buying the entire coin/company at the available buying price.

For investors, checking the daily expense is like checking the pulse of a patient for a doctor. You will have to know where is the money being spent.

Japanese companies hit the spot when they invest to grow their company

I read one amazing survey on why Japanese companies were the most durable companies amongst all the other companies. They didn’t gamble. They used their money very carefully. Whenever they invested their money in any product expansion or anything which helped them grow the business, they were already tested thoroughly and they almost knew that the invested money will give their business a good growth.

Now, let's talk about Sirin labs. They signed up Messi for an untested product called Finney phone. Now we all know how costly it is to sign up Messi for your brand. Messi is the best and the best always get above 90percent of the revenue in most of the industries. There is no huge difference between the best and the second best but a little more perfection than the second one makes him the best and he gets the revenues. And the next thing which I heard was that they might run out of cash. They burned around 157 million USD in 18 months. Can you imagine that?

I read an interesting survey done on hundreds of startups about why startups fail and the second most popular reason for the failure of a startup was running out of the cash.

Of course, the first one was the no product-market fit. Now you will understand the reason why we need to check the daily expenses needed to run a coin’s operations bcoz’ not everyone can produce bitcoin like product which is self-evolving.

Now, let’s go ahead and learn how to check the daily expenses of the coin.

If you want to know the daily expense or monthly expense of a coin then you will have to ask the team that in which address the team is holding the development fund of the coin. Once you know the address of the development fund for the coin you can keep track of it on a monthly basis and then divided it by 30 to know the daily expenses and you will also be able to know that after what time the team will run out of the cash if they keep using it at this speed without any revenues. If the fund is in any stable coin like usdc or tusd then it is better but if it is in their own coin than you will have to keep checking the price and multiply it with the current holdings.

When you are new to any market or you are busy making money from other fields except investing field than you need a person who is experienced and whom you can trust to make money in the markets. You should be able to have the advantage and skills of a guy who is doing great in the market to make money in the market. The cryptocurrency market is more than new and the tricks of the stock markets work here but with improved versions which will take a lot of creativity and thinking. Also not to mention that not everything in the stock market works here. Maybe around 50percent tricks will work in this market. It is like art you have to connect a lot of dots to become good in this market with consistency. So the thing is that you will have to do a lot of trial and error to become good at this. Do you have that much time or money to keep doing that and also study things every day for 10 to 12 hours a day? then you can do investment after 2 to 3 years by yourself. Otherwise, you need a person like me who is in this market for a while (around 2.5 years) to help you guide things.

See, the Advantage of the cryptocurrency market is that people are still finding new metrics to better judge this market and people are still doing trial and error to better understand this market. Now, this is the advantage to a person like me who doesn’t have the stock market experience. Because it is hard for me to beat people like Warren Buffet in the stock market because he has experience of 60 years plus and if I say to myself that I can just go and beat him in the stock market in just 5 years then I am a fool bcoz I just can’t. But here I have a chance to be the best in the future bcoz here no matter how much experience you have of investing, still, you will have to put similar efforts which I am putting to make money in this market. So whoever will work hard with some quality intelligence will have a great chance of making an empire.

I am here for the long term, not the short term so I know I will always make money in this market. If you want any kind of guidance in managing your portfolio than you can be in touch with me on my telegram channel. I charge very little amount in which you will be able to see my portfolio and copy it if you want. And designing this kind of portfolio takes a lot of time and effort with some serious creativity. I hope to see you on my telegram channel. Your comments and claps are also welcomed.

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