Dash ‘Incredibly Undervalued’ Says eToro Market Analyst
A senior market analyst for eToro just released a market research paper evaluating Dash. The paper covers what the currency is, what its next steps will be in its major “evolution” plan, and what the author believes the true market cap for Dash should be. Needless to say, the report is very bullish. Join us as we go over the report by eToro senior market analyst Mati Greenspan.
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What is Dash?
For those that aren’t familiar with Dash, let’s take a moment to go over some of the basics. If you’re already familiar, feel free to skip to the next section.
Dash is a highly popular cryptocurrency project that was created by Evan Duffield in an attempt to resolve shortcomings within the bitcoin protocol. The project has grown immensely and is now worth more than $3 billion USD. The cryptocurrency is quite unique as it was arguably the father of masternodes and project self-funding.
With Dash, a portion of each block reward is set aside into a transparent account from which individuals or groups may submit proposals to be voted on. These proposals, if approved, can then be funded by Dash itself. In this way, Dash operates as a true DAO.
Today, the currency is trading for around $380 each. It held an all-time-high of $1500 before the major crash earlier this year.
The Greenspan Report
Dash is digital cash… and according to our analysis, it's also acutely undervalued compared to the rest of the cryptocurrencies.
Read the full paper now: https://t.co/9veuiWOFMf
— Mati Greenspan (@MatiGreenspan) May 21, 2018
The report is broken up into several sections. The first part introduces some of the core elements of Dash, including its history and who is behind it.
The report strangely lists Dash as being a delegated proof-of-stake system. In truth, the coin uses a hybrid proof-of-work and masternodes system.
The next section of the report goes over major initiatives the developers are involved in, including the Dash Evolution plan. In short, the evolution plan is one that will migrate Dash from being purely a medium of exchange to one that will in some ways mirror features that blockchain projects like Ethereum offer.
Specifically, it will offer smart contracts and the ability to power decentralized applications. The plan also includes steps to make the cryptocurrency easier for non-technical users to use.
A few months ago, Evan Duffield released a post on Medium outlining his plans for Dash to scale and to eventually move away from proof-of-work mining altogether. The eToro report does not make direct mention of this plan, however.
The report then covers what the digital asset is currently being used for. It cites the currency’s growth within financially troubled parts of the world, including Venezuela and Zimbabwe. Further, it suggests that particular focus should be made on parts of the world prone to hyperinflation problems.
The Bullish Case
Greenspan introduces an equation which is used to justify the claim that Dash is currently significantly undervalued. The equation includes variables representing the total supply, the velocity of the money (which roughly means how often it moves or changes hands), as well as the current price and quantity of the asset. Finally, it factors in the inflation rate of Dash as well as the amount of the currency that is tied up in masternodes and thus effectively removed from circulation.
The end result, according to Greenspan, is a valuation worth around $5.75 billion, above its current cap of $3.31 billion. So according to Greenspan’s paper, “Dash is incredibly undervalued”.
How Important is Velocity?
The crux of the argument put forth by Greenspan is largely based on Dash’s velocity. Greenspan cites the velocity of Dash at 4, while bitcoin lags behind at a much lower 1.5. This suggests that it is being used more as a true means of exchange (such as using it to make purchases), while bitcoin is largely being used as digital gold, or as a long-term storage of value.
This assertion does not mean that bitcoin is inherently worse, but that Dash is a far more nimble and fast-moving unit of account. Greenspan attributes this to its low fees and faster transaction times when compared to bitcoin today.
Given these assertions, as well as the current and upcoming growth and initiatives that Dash Core is undertaking, it may well be somewhat undervalued.
The project is not without its flaws, however, as it recently appeared to be suffering from some degree of mining centralization.
As was reported by P2Pool in February, 50 percent of the Dash proof-of-work hash rate was being centralized at Antpool, owned by Bitmain. The reason for this is likely because the coin can only be profitably mined using Bitmain ASIC hardware (specifically the D3). That hardware ships with default settings that point the miner at this particular mining pool. Therefore miners would need to tinker with the hardware to locate an alternative mining pool in order to increase the width of distribution of the network hash rate.
After having frequently sat among the top 5 currencies by market cap, Dash today resides in 13th place. While still a strong position, it appears to be losing ground to other blockchain projects like Cardano and EOS – both of which have yet to launch formally.
But with a team of well-funded professionals working full-time on the project thanks to its self-funding features, Dash may still have a lot of room to grow.
Do you agree with Greenspan’s report? Let us know in the comments section below.
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