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Most Exchange Tokens Are ‘Undervalued’ - Research

Most Exchange Tokens Are ‘Undervalued’ - Research 101
Source: Adobe/megaflopp

Given the current trend of increased activity in both the spot and derivatives market for crypto trading, a number of exchange tokens may represent good investment opportunities at current prices, according to token data and rating agency TokenInsight.

In its latest Exchange Token Valuation Report, the agency said that it has “discovered that most exchange tokens are undervalued” at present prices. To arrive at this conclusion, the report used a range of different metrics, including the Price to Burn ratio, Price to Earnings ratio and several other less known metrics, to calculate a “price target” for each token.

The exchange tokens covered in the study were Binance coin (BNB), Huobi token (HT), OKEx token (OKB), FTX token (FTT), KuCoin shares (KCS), and Leo token (LEO), as well as the less known tokens HBTC captain token (HBC) and BitMart token (BMX).

Among these, only BitMart’s BMX and Bitfinex’s LEO were deemed “overvalued,” while all the others received an “undervalued” rating.

Notably, BNB was given a target price of USD 20 to USD 22 by TokenInsight, which represents an increase of between 15% and 25% from the current price level of around below USD 17 per coin. According to the research firm, Binance is “a strong market contender” that has gained “significant market power globally with growing traction in mainland China.”

Even more bullish, however, was the case the report made for Huobi token, giving it a target price of between USD 6.28 and USD 6.94, a gain of more than 40% from current levels.

Most Exchange Tokens Are ‘Undervalued’ - Research 102
Source: TokenInsight
Most Exchange Tokens Are ‘Undervalued’ - Research 103
Source: TokenInsight

Further, the report said that most exchange tokens – when measured in terms of bitcoin (BTC) – are highly correlated with the bitcoin/US dollar pair in the long run. It also noted that while for example the LEO token has been strongly correlated with other exchange tokens in the first quarter of this year, that correlation has “dropped significantly” over the past 30 days.

Most Exchange Tokens Are ‘Undervalued’ - Research 104

Also, according to the report, Binance’s exchange token BNB, Huobi’s HT, and OKEx’s OKB all appear to be strongly correlated with ethereum (ETH), which suggests that exchanges see increased demand for their tokens whenever the broader crypto market rises.

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