It has been a general convention for years to assess a crypto based on, price and total market capital (market cap). The presumption is that a crypto with very high market cap, would have better potential – speaking in terms of price appreciation. For those of you who are not familiar with the term ‘market cap’ of a crypto, here is a brief explanation. This number is derived by multiplying the circulating volume of the crypto, by its price.
Looking at the above formula to calculate the market cap of a crypto, you would notice that the market cap would rise, with a rise in the circulating volume and/or a rise in the price of the crypto. The interesting thing is that, many cryptocurrencies with a small market cap number, could have better potential as compared to some cryptos with a much larger market cap! Read that sentence twice, it holds much meaning for a crypto investor.
Let’s look at a cryptocurrency investment from the view point of an investor. Investing a certain amount of money X at any point in time, could yield X+p or X-l. Explaining those symbols, X+p would mean that the investment yielded a pofit of ‘p’. On the other hand X-l, would imply that the investment made a loss which is ‘l’.
A loss is never a good thing though, the possibility of limiting losses does exist. But while a profit is desirable, the investor would compare that profit to the initial amount invested. The time period for which the investment was held, would also figure into the equation. Basically an evaluation of the ROI (return on investment) would be done.
This is the reason why Glitzkoin suggests that, cryptocurrencies be ranked based on their ROI. This is a better indicator of potential as compared to the market cap. Having said that, making an investment decision cannot hinge on just one factor.
While a good ROI is a primary factor that could attract an investor to a specific cryptocurrency, evaluating other factors like project backing, track record, price trend, presence of any negative feedback etc – is equally important. Reference is to cryptos in general and not, just to the Glitzkoin GTN token.
Giving importance to ROI when investing in a crypto, would give investors a better insight into future prospects. It would also reveal small cap cryptocurrencies that, have good potential. These cryptos would not feature prominently if, complete focus was given to market cap of a crypto.
Glitzkoin hopes that the concept of evaluating cryptocurrencies by, studying their ROI – would gain wider support. This is something that would allow the development of more resilient and stable crypto markets in 2022 and beyond.
GLITZKOIN: A quick recap of the Glitzkoin project and the GTN crypto token. The project was launched to improve the demand for natural diamonds and to enhance, the efficiency and productivity of the multibillion dollar industry.
The DiaEx diamond trading platform was developed using Stellar blockchain resources. The GTN token was launched as part of the project and is designated, as the mode of payment on DiaEx. Promoted by second generation diamond veteran Navneet Goenka, Glitzkoin assigned a multifaceted role to the GTN token.
The trading platform was completed in 2019 and was put through rigorous testing in early 2020. A team of diamond dealers subsequently did a pilot run on DiaEx with, actual transactions made on the platform. This process was largely successful and revealed a few areas for improvement. The Glitzkoin tech team was handling the minor adjustment when, the pandemic and subsequent lockdowns slowed down the process. The management will reschedule the full launch of DiaEx once the health crisis eases.
Talking about the multifaceted nature of the GTN token, the project is also focused on further increasing usage for the crypto – this aside from crypto exchange trade and the payment usage on the DiaEx platform. The concept is to have operators of various businesses, accept the GTN token as a mode of payment in their operations. Moving this idea forward Glitzkoin has confirmed a partnership with online ticketing giant Myticket.asia, wherein clients of the ticketing portal could use the GTN token as a mode of payment. Technical requirements for the integration of systems on both sides is at an advanced stage, nearing completion. Reviewing the challenges that the entertainment industry has been going through during the COVID pandemic, both managements have decided to set a launch schedule when the situation starts to normalize. The arrangement setup between Glitzkoin and Myticket.asia will form the blueprint, for similar deals to be negotiated with other business operators.