What is coin-based valuation? Coin-based valuation: Using digital currency (such as Bitcoin) directly as the unit of account, investors focus on the relative value between different digital currencies. For example, if Ethereum is priced at 0.05 Bitcoin, it means 1 Ethereum can be exchanged for 0.05 Bitcoin. This method is suitable for investors who hold digital currencies long-term, as it avoids the costs of converting to fiat currency, but it also involves the risk of digital currency price fluctuations. - U-based valuation: Using stablecoins pegged to fiat currency, such as USDT, as the unit of account. Investors see digital currency prices expressed in stablecoins (e.g., Bitcoin priced at 10,000 USDT).
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What is coin-based valuation?
Coin-based valuation: Using digital currency (such as Bitcoin) directly as the unit of account, investors focus on the relative value between different digital currencies. For example, if Ethereum is priced at 0.05 Bitcoin, it means 1 Ethereum can be exchanged for 0.05 Bitcoin. This method is suitable for investors who hold digital currencies long-term, as it avoids the costs of converting to fiat currency, but it also involves the risk of digital currency price fluctuations.
- U-based valuation: Using stablecoins pegged to fiat currency, such as USDT, as the unit of account. Investors see digital currency prices expressed in stablecoins (e.g., Bitcoin priced at 10,000 USDT).