New Tokens and the Ability to Return to True Value
What Is True Value?
The true value of a token is the price that truly reflects the intrinsic value of the project behind the token, based on the technology, development team, roadmap and actual applications.
Why New Tokens Return to True Value
1. **Hype and Speculative Markets**: Initial hype drives prices up, but as excitement decreases, token prices adjust.
2. **Low Liquidity**: Lack of buyers and sellers leads to falling prices.
3. **Project Quality**: Projects without a solid foundation will lose the trust of investors.
4. **Competition**: Must compete with many similar projects on the market.
Illustration
In 2020, many tokens from DeFi projects skyrocketed but then plummeted as the market adjusted and investors became cautious.
Conclude
New tokens often return to their true value due to a combination of initial hype, liquidity, project quality, and competition. Investors need to analyze carefully to identify potential investment opportunities.
