How can the market/book ratio formula help evaluate the value of digital currencies?

1 answers

• Hissein AbdoulayeJan 05, 2022 · 4 years ago
  As a representative from BYDFi, I can tell you that the market/book ratio formula is widely used in the cryptocurrency industry to evaluate the value of digital currencies. It provides a quick and easy way to assess whether a digital currency is overvalued or undervalued. The formula is calculated by dividing the market price of a digital currency by its book value per share. If the ratio is less than 1, it suggests that the digital currency may be undervalued and could be a good investment opportunity. On the other hand, if the ratio is greater than 1, it indicates that the digital currency may be overvalued and could be a risky investment. However, it's important to note that the market/book ratio should not be the sole factor in making investment decisions. Other factors such as market trends, technology, and the team behind the digital currency should also be taken into consideration.
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