Litecoin (LTC) and Nano (XNO) Present Better NVT Ratios Than Bitcoin (BTC), Signaling Undervaluation
- 王林Original
- 2024-07-22 06:58:49673browse
The Network Value-to-Transaction (NVT) ratio is a powerful cryptocurrency fundamental analysis indicator often used to spot overvalued and undervalued cryptocurrencies.
The Network Value-to-Transaction (NVT) ratio is a cryptocurrency fundamental analysis indicator used to spot overvalued and undervalued cryptocurrencies. A high NVT suggests an overvalued cryptocurrency, while a low NVT suggests an undervalued cryptocurrency.
On July 21, Finbold encountered two networks with a better NVT ratio than Bitcoin (BTC), suggesting they could be undervalued against the leading cryptocurrency.
Bitcoin NVT is on a notable uptrend since November 2022, as demand for BTC has concentrated on off-chain transactions and derivatives trading — via futures contracts or spot Bitcoin ETFs.
Data retrieved by Finbold from Santiment showed an all-time high seven-day Network Value-to-Transaction ratio of 205.63. Santiment calculates the metric by dividing Bitcoin’s market capitalization over the network’s transaction volume in the last seven days.
Hence, a higher NVT means the market valuation is proportionally higher than how much value the network moves. According to this metric, BTC could be overvalued as its blockchain transaction volume has stagnated while the price continues to surge.
Lower NVT: Undervalued cryptocurrencies against Bitcoin
However, other cryptocurrencies with a lower capitalization have been moving a proportionally higher value on their networks, suggesting an asymmetry. These coins could be undervalued against the market’s leader, offering an interesting opportunity for less conservative investors.
Litecoin (LTC): 2.59 NVT
Litecoin (LTC) shows a scenario that is directly opposite to Bitcoin, with an NVT downtrend as the network is processing a steady transaction volume despite the price drop.
At the time of writing, LTC trades at $73.41, confirming trades amounting to $8.93 billion in a week. This results in an extremely undervalued 2.59 Network Value-to-Transaction ratio.
Nano (XNO): 6.78 Network Value-to-Transaction
The Nano (XNO) network has confirmed 132,424 transactions aggregating 19.78 million XNO in the last seven days. Considering a $0.97 price per coin, it results in a seven-day transaction volume of $19.18 million. Data is from BlockLattice.io.
The project currently has a market cap of $130.2 million, considering a fully circulating supply of 133.24 million XNO. Thus, Nano’s Network Value-to-Transaction ratio of 6.78 suggests an undervalued cryptocurrency, weighted by its use and capitalization.
It is worth noting that having a low NVT does not guarantee these cryptocurrencies will necessarily outperform Bitcoin. This is a single fundamental analysis indicator that investors can use in addition to further analyses and research.
Moreover, the content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
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