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Token Insight: most exchange tokens are undervalued

Token Insight: most exchange tokens are undervalued

According to TokenInsight research, exchange-traded tokens, such as Binance Coin and Huobi Token, are worth much less than their real price, and tokens issued by KuCoin and Bitfinex, on the contrary, are overvalued.

As the analytical company TokenInsight notes in its report, exchange tokens are issued by cryptocurrency exchanges, and the owners of these tokens are usually entitled to various advantages when trading on the platforms, for example, lower transaction fees.

The most famous of these tokens is Binance Coin (BNB), issued by the Binance cryptocurrency exchange. According to CoinMarketCap, the market capitalization of BNP is about $2.7 billion, and the token is in the eighth place among the largest cryptocurrencies by market capitalization.

BNB is currently trading at $17.4 and its price is one of the highest among other exchange tokens. For example, the Huobi Token (HT) and Opex (OKB) tokens are much cheaper, and their market capitalizations are much lower. But TokenInsight claims that most of these tokens are undervalued.

Using various indicators, the firm created a model that calculated the” fair price ” of these exchange tokens. According to the TokenInsight model, BNB should cost about $21.28, as Binance has expanded its activities in the derivatives industry and in China.

HT, which now costs $4.43, should cost about $6.28, as the company “has non-trivial access to China’s Central Bank and government officials.” OKB, which cost $4.99 at the time of the study, should cost between $5.39 and $5.95. Its current price is $5.49.

However, some exchange tokens, on the contrary, cost more than they should. For example, the unus SED LEO token of the Bitfinex exchange, which is trading at $1.24, should cost approximately $0.79, and the KuCoin Shares token of the KuCoin exchange should cost $0.87, whereas at the time of the study its price was $0.97.

The analytical company claims that since cryptocurrencies correlate with BTC, it makes no sense to judge their value using Fiat currencies, such as the US dollar. The researchers also found that the cost of THESE, OKV and RE is closely related to the price of ETH.

Recall that, according to a recent report by the analytical company CryptoCompare, the volume of trading in cryptocurrency derivatives in may set a new record.