RISE IN TOKEN VALUES
- REX Telos
What are the parameters the determine the rise in value of tokens like Telos or every other tokens.
This is largely a function of supply and demand. How many people want to buy a given token, and at what price they will tolerate, against how many people want to sell, and at what price.
A token's supply may regularly increase or may remain the same or less. Sometime tokens that could be traded are locked up in staking accounts to ear rewards and this effectively limits the supply.
The demand for most tokens is actually similar to regular stocks. It is often seen as the perceived future value discounted to the present. So in an efficient market, many people would be making informed estimates about what a token or stock may be worth in the future. Then they are calculating the likelihood of this actually occurring against the time it may take to occur.
So if you thought that token AAA would be worth $2.00 each in 5 years based on expectations around its utility, and if you thought there was a 30% chance of this actually occurring versus the project failing, then one way people could calculate the present value is $2.00 (future value) * 30% (chance of success or 'risk') * 80% (present value compared to five years in the future - excluding risk), then a present price based on this would be $.48 for AAA.
Now if you came to believe that the ultimate utility value or chance of success would increase due to new features being announced or released, or if you thought it would decrease based on delays or better competition elsewhere, then you would adjust accordingly. All buyers and sellers make some kind of implicit calculations about present value and -- in an efficient market -- the token value would represent a hive mind consensus about the overall present value based on each person's calculations.
Of course, no market is totally efficient and the crypto market especially is not. So this market inefficiency leads to wide swings in price or the price being well out of line with other comparable tokens or stocks. Highly inefficient markets can represent a good opportunity for gains when utility or odds of success are not properly reflected in the price because the underlying fundamentals don't need to change, only the market's perception of them, which should become more efficient with passing time.
The major thing that I think determines the rise in value of token is the demand of the token. if there is more demand for a token, that is if people buying are more than people selling, the value will automatically rise