If development activity and utility equate to value is Steem undervalued?
Background:
I am bullish on Steem, despite its low current price due to what I see as amazing activity and development here. But I don’t depend on my assessment skills alone. I am searching the internet daily and Steem feeds for evidence that other people or investment firms who are looking at the cryptocurrency market of over 2000 coins are looking at Steem. I found this company called Electric Capitol, which resides in Silicon Valley, Palo Alto, California. This company invests in cryptocurrency projects and publishes a quarterly development report. The report is about development, utility and organizes the companies by development measurements and market cap. It compares the Coinmarket cap ranking of companies to the number of active developers and development activity as recorded on the main public repositories worldwide. It seems that investment firms in cryptocurrency believe that value lags behind development, so they are researching all cryptocurrency projects for the coins which are very active development but small market caps. They are looking for the undervalued ones. It is basically a famous value investing principle to look for good companies which are undervalued in a bear market. I found that it’s own data indicates that Steem is on the same map as many famous coins, but a relative unknown coin. It was exciting because it indicates that Steem is very undervalued. It also suggests that as more and more people start producing data like this Steem’s day’s in obscurity are numbered. But you may see the charts yourself and draw your own conclusions.
Review: Electric Capitol Developers Report.
A little more about the company Electric Capitol. They invest in programmable money tokens based on innovative technology, market adoption, and real use cases. They claim to perform deep technological diligence far beyond just reading a whitepaper. Their stated efforts include compile code, do security audits, run nodes to programmatically inspect the blockchain, have market intelligence based on proprietary software, and more. The report is over 20 pages, these are excerpts only, so you need to go to the source article for the complete article, but these are important highlights.
The Dev Report is a quarterly publication by Electric Capital.
The Dev Report uses Electric Capital’s proprietary data to trace where developers are building across the crypto ecosystem.
Developers are a leading indicator for where value will be created and accrue.
We indexed 21,000+ code repos, de-duplicated 16M commits to find original code authors, analyzed 130k developers and across 3k crypto projects.
These are the charts I found Steem on as a project with very significant developer activity, but it’s market cap is far less then the other coins on these charts, suggesting that if value follows development, Steem is undervalued.
Methodology
Source
Three General Groups of Cryptocurrency Reviewed
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Steem is here amongst the well know cryptocurrency projects with higher market caps or valuations.
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Steem is here amongst the well know cryptocurrency projects with higher market caps or valuations.
Source
Steem is here amongst the well know cryptocurrency projects with higher market caps or valuations.
Source
Steem is here amongst the well know cryptocurrency projects with higher market caps or valuations.
Source
Steem is here amongst the well know cryptocurrency projects with higher market caps or valuations.
Source
Steem is here amongst the well know cryptocurrency projects with higher market caps or valuations.
Source
Steem is here amongst the well know cryptocurrency projects with higher market caps or valuations.
Source
Steem is here amongst the well know cryptocurrency projects with higher market caps or valuations.
Source
Conclusion:
If your a value investor or a dividend investor you probably love investing in a bear market because you can find great companies which are undervalued. The key however is being able to determine value. The current measurement stick for value uses utility, as measured by the number of applications on a blockchain, and the number of users utilizing those applications. This type of valuation is frequently used to indicate why Ethereum is valued highly. It leads in number of applications on its blockchain and number of users. It is also partially used to explain the value of Bitcoin, Monero, Zcash, Dash, Litecoin and others. They are used to store and transfer wealth. The key word here is “used” as synonymous with utility. But the other method of valuation is developer activity, number of developers, the number of changes to core code, plus additions such as side chains. Investment firms and investigative bodies as varied as Weiss Investments, the Chinese government, officially known as The People’s Republic of China and now this Silicon Valley investment firm are looking at development activity and using it as a measurement of value. They find it correlates well with value in widely known coin projects like Bitcoin with large market caps. So they think it can be used with the other measurement “utility” to indicate when a company is undervalued. By these two measures Steem is undervalued. Now that is my opinion, it’s not investment advice, but my conclusion. What do you think?
✍🏼 Written by Shortsegments.
Picture Credit
All charts are from the Electric Capital quarterly development report. Source
They are located in Palo Alto, California.
Website: http://www.electriccapital.com
Twitter: @ElectricCapital
The article lead graphic was created using PicStitch and photos from ShutterStock, a source of royalty free photo.
References.
1.https://www.electriccapital.com/
- https://static1.squarespace.com/static/5c745b19c2ff6174b1290e42/t/5c805a3ae4966b1ce3a2a937/1551915603922/The+Dev+Report.pdf
- https://www.steemleo.com/steem/@ezzy/bullish-on-steem-well-now-s-the-time-to-be
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Agree, very encouraged by all the development, so I will continue to buy at current levels.
Me too. I am wondering if it will go lower?
Thank you for your submission.
This is a really nice and extensive review but not really editorial.
I love the fact that you were able to back your points with images and graphics. And also, it is quite glaring that you put in a lot of research into the making of this article. Well done, you did a great job.
In your future posts you might want to consider making your posts more readable.
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Thank you for the feedback. I will work on making my posts more readable.
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