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September 19, 2021
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Cryptocurrency

How to assess whether a crypto project is undervalued?

The world of altcoins simply offers thousands of investment opportunities. However, how can we assess whether or not a particular crypto project is undervalued?

Small startups to large institutions, we can invest in numerous tokens. There are so many options for making investments in a crypto project that it is practically impossible to study details case by case to understand what is in fact undervalued or even overvalued. However, there is an interesting tool that we can use to our advantage in this regard.

Flipside Crypto: Introduction to the platform

THE Flipside Crypto focuses on providing analytical data for crypto organizations. Its set of study tools gives insights about some aspects that can give us indications if a specific project can be worth more than its current price.

Having partnerships with more than 75 organizations such as CoinMarketCap, Messari, MarketWatch and TheStreet and counting on investments from institutions at the level of CoinBase Ventures, True Ventures, Founder Collective and Digital Currency Group, Flipside Crypto has consolidated itself as a research source mainly due to its strength: the FCAS index.

FCAS: The index behind a more accurate assessment

THE FCAS (from English Fundamental Crypto Asset Score or ‘Fundamental Crypto Asset Score’) is a comparative metric used to indicate the ‘health’ of crypto projects. The score comes from the interactivity between three primary factors in the life cycle of the projects: user activity, behavior of the development team and maturity of the segment in which the project is located.

Classifications based on FCAS consist of a numerical scale from 0 to 1000, in addition to letters. The numerical classification is derived from a combination of classical statistics with Bayesian approaches to provide a simple score for each metric. Thus, the best projects reach a score between 900 and 1000 with an S rating (from superb, or ‘splendid’), while the most fragile projects reach a score below 500 with an F rating (from fragile, or ‘fragile’).

FCAS classification scheme

The additional resource capable of indicating the potential of the projects

In addition to FCAS, enthusiasts and investors can rely on another criterion, called CDR. Crypto Disparity Ratio, or ‘Crypto disparity rate’). This index makes a relationship between the FCAS classification, explained above, with the total current market capitalization of each project.

Therefore, a result above 1 reflects an undervalued project, while a result below 1 indicates a theoretically overvalued project. Obviously, the further away from 1 the score, the more significant the evaluation – positive or negative – for the project.

This is clear in the tweet below, where IoTeX – TOP5 project in undervalued, according to Flipside Crypto – highlights the study:

IoTeX is one of the most undervalued projects in the industry based on Flipside Crypto’s 2020 statistics. Now is the perfect time to join IoTeX for good – what are you most looking forward to in 2020?

Conclusion

The platform makes a wide variety of data available to its users. In fact, to have access to such information, just make a quick registration on the site and everything can be easily accessed.

Today’s concept is that cryptocurrencies are a risky investment. Therefore, any information that may be of help when studying certain projects is always welcome.

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