Top 20 Cryptocurrency Price to Circulating Supply Ratio – Measure of Store of Value
It is an attempt to measure the price appreciation ratio with cryptocurrencies.
This ratio of price/circulation supply essentially measures the price appreciation of a cryptocurrency. We can call it the ‘Store of Value’ ratio.
If the ratio is large, then it signifies that the market perceives a higher value in the cryptocurrency.
Let’s take the case of Bitcoin [BTC]; if Bitcoin reaches $100,000 apiece, the total market capitalization of BTC would above $1.8 trillion. At that price, the price-circulating supply ratio would increase.
Bitcoin and Bitcoin Cash are currently leading the charts.
Group 1: e to the power -6 to -7
This includes Ethereum, Bitcoin SV, Monero.
A distance close is Litecoin and then NEO
Group 2: e to the power -8 to -9
This includes Binance, Huobi, Cosmos.
Then Chainlink, EOS, and Tezos.
The data roughly gives us a strong comparative figure. For example, see exchange tokens, BNB, HT, and OkCoin have relatively comparative ratios.
Surprising, XRP has the worst price appreciation ratio compared to the other top 20 cryptocurrencies. The only reason XRP is in the top w.r.t. Market capitalization is due to its vast supply.
A couple of Disclaimers
However, the ratio is primarily skewed with cryptocurrencies with an ample supply. XRP, Stellar, Cardano, Tron all show a tremendously low ratio.
Evenly so, it is also skewed towards the positive side in case of small circulating coins. This talks about the comparatively limited supply of cryptocurrencies.
Nevertheless, the total market capitalization creates a massive barrier to the increase in price. As soon as a cryptocurrency start flipping the market capitalization of the other cryptocurrency, it initiates competitive trading and induces uncertainty. Hence, creating a psychological barrier.
One usually talks about the entire business a cryptocurrency conducts. However, if viewed as a store of value, the supply would be an active limiting as a factor to price as well.
Obviously, the measure of a coin will be its market capitalization. However, the price appreciation ratio reflects that these individual coins must find more utility to push the demand.