In fact, many concepts and hype values are common in the crypto market and the traditional financial market.
In the traditional financial market, the well-known stocks are actually a valuation of the future of the enterprise by traders or the market, and this valuation is reflected in the stock price, and the financial report is a process of valuation exchange, that is, a process of future phased realization. However, this does not prevent traders in the traditional financial market from overvaluing the stock price. For example, the current US technology stocks, although the United States and even Wall Street itself do not admit it, there is indeed a risk of overvaluation and a large bubble.
The same is true for the crypto market. The initiation of any project, from project establishment, whether it is a start-up team or a financing round, is basically a valuation of the future of the project. However, unlike the traditional financial market, many projects in the crypto market have few fundamental reference values, which makes it difficult to measure the valuation with specific conditions. This also leads to excessive short-term market value and increased bubbles in many financing or primary and secondary tokens. At present, what supports the valuation of cryptocurrencies is actually narrative, and whether the narrative is closed and complete also determines the current and future valuation assessment.
Looking back at the history of cryptocurrency, many excellent narrative crypto projects actually performed mediocrely after listing on exchanges. This is actually easy to understand. The excessive valuation in the early stage needs to be tested by the market after the token is listed, and the valuation exceeds the actual situation. After the token is "listed", people lose the reference value, so the valuation naturally needs a digestion process. Cryptocurrency lacks the process of phased valuation redemption such as financial report announcement, which makes it difficult to continue the subsequent narrative. As a result, many excellent blockchain project tokens have mediocre performance.
Personally, I think that excellent blockchain projects are not necessarily equal to excellent coin prices, and they all have a staged performance. Now you can reflect on whether the situation of the tokens in your hands is in line with what I said. This is also why I don’t recommend chasing high prices when there are many good tokens.
