2020-6-8 17:07 |
A recent report by TokenInsight, a crypto analytics firm, has revealed that most exchange-based tokens in the market are currently undervalued. The firm applied a number of metrics in its analysis given the ambiguous nature of crypto markets; some of the financial valuations include Burning Yield, Price to Burn ratio, Price to Earnings ratio, and the Discounted Cash Flow (DCF) method.
Following the analysis, it emerged that leading exchange tokens such as Binance (BNB), Huobi (HT), and OKEx (OKB) are undervalued. However, their counterpart native tokens for KuCoin and BitFinex crypto exchanges are overvalued based on the TokenInsight metrics.
Undervalued Crypto Exchange TokensThis type of digital asset gained popularity in the past two years as more exchanges popped up after the crypto market bull-run of 2017. Their value proposition lies in operational convenience within crypto exchanges as well as friendly costs when it comes to conversions and transactions.
Binance Coin vs TokenInsights IndexAs highlighted, the Binance native token ‘BNB‘ featured among the undervalued digital assets. This coin was trading at $17.34 with a market cap of around $2.6 billion at the time of the study. According to data from TokenInsight, the token should be trading at $21.28 based on a ‘fair price' approach by the analytics company. Fundamental factors such as Binance's market share increase in the derivatives niche and mainland China presence were cited as the driving forces.
Huobi Token vs TokenInsights IndexHuobi token with a market value of $4.43 ought to be around $6.28 as per the TokenInsight report. It goes on to highlight that this digital asset enjoys access to the Asian market; a fundamental factor which should drive the price higher than its current valuation,
“enjoys unusual access to China’s central bank and government official[s].”
OKB vs TokenInsights IndexAs for the OKEx native token, OKB, it seems to have already hit the predicted valuation of $5.39-$5.95. Its current price is $5.49, up from $4.99 at the time of valuation. This digital asset also enjoys a top 40 position in the market-cap ranking with $329,231,105 according to Coinmarketcap.
Notably, the analysis also found a high correlation of price movement in the crypto market. TokenInsight Chief Analyst, Johnson Xu, has since noted that BTC's recovery after the March 12 market crash has been replicated by peer assets in the digital currency space,
“This has a huge relationship with the general recovery since the Black Thursday crash.”
While the analysis was conducted in an independent manner, TokenInsight was keen to disclose that some of the subjects are its business partners. Therefore, a conflict of interest may arise despite the efforts to use a fair model based on varied financial valuation metrics.
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