Cryptocurrency investment is very complex and changeable, especially with the development of different cryptocurrencies, NFT platforms and web3 projects, the amount of information is rapidly expanding, making people feel dizzy and don't know where to start. In the face of this, I think it makes sense to understand cryptocurrencies in four segments: bitcoin, ethereum, NFT, and other Web3 projects.
Bitcoin is considered "digital gold" and represents the value hub of cryptocurrency and its role in preserving value. The value of Ether is derived from the rapidly growing number of applications on the Ether blockchain platform, which is akin to "digital oil" In general, the value of Ether can be enhanced by strengthening the number of applications active on the platform. By looking at Ether as a company and analyzing its revenue (Ether burned) and expenses (Ether newly issued) to get an ideal P/E ratio, we can get a clearer picture of its value potential.
At this stage, in addition to the three ways of holding to increase its liquidity, the main way to increase the value is to increase the lock-up rate. When the lock-up rate exceeds a certain threshold, the number of Ether coins in circulation will become scarce and the opportunity for an explosive price increase will arise. While the emergence of a Layer 2 solution will help reduce Ether congestion, its value potential is still largely dependent on ETH itself, and Layer 2 can only be used as a transitional product.
Overall, it is critical to understand the characteristics and potential of different varieties of cryptocurrency investments. Keeping an eye on the market, using different holding strategies, and making adjustments at the right time will help you achieve the best returns in this highly volatile area.
