Understanding one of the most important metrics in Crypto. The X to BTC ratio.
3 min read
A huge mistakes that people often make is looking at their favorite crypto in their fiat value.
The X to BTC Ratio is a better way to look at your portfolio, it is the value of an asset relative to Bitcoin, it allows you to see how your bags are performing relative to simply holding Bitcoin. You’re probably in crypto to make money and this metric allows you to see if your speculative investments are gaining or losing against the greater crypto market.
Lets say you bought Algorand for the first time in February 2021 around $1.50 decided to diamond hand it past $2 and are now significantly down on your investment….
… But you say “wait, this isn’t a fair statement, this is a bear market everything is down even Bitcoin!”
To which I do agree with you, everything is down over the last two and a half years. So instead lets look at the Algorand to Bitcoin chart, this will show us how Algorand is performing relative to Bitcoin.
If you purchased Algorand in Feb. 2021 every one Algorand you purchased was worth approximately .00003 BTC.
This means one Bitcoin was equal in value to approximately 33,333 Algorand.
With the change in the value of Algorand and Bitcoin since FEB. 2021 – one Algorand today is worth approximately .0000036 BTC.
This means today one Bitcoin is equal to approximately 277,778 Algorand.
Even though Bitcoin and Algorand are both down since FEB. 2021 you can use this metric to see that Algorand is down 8.33x more than BTC over the same time period.
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The X to BTC Ratio helps to give us a clearer picture of how a crypto asset is performing against the greater Crypto Market separate from the underlying price over a given period of time.
If instead of Algorand we look at Cardano to BTC we see
One Cardano was worth approximately .000025 BTC in FEB. 2021 and is currently worth .0000094 BTC
One BTC in FEB. 2021 was equal to roughly 40,000 ADA. One BTC today is equal to roughly 106,382 ADA
ADA has dropped in value 2.66X against BTC since FEB. 2021.
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As a bonus we’ll look at Moons to Bitcoin
One Moon was worth approximately .0000032 BTC in FEB. 2021 and is currently worth .000011 BTC
One BTC in FEB. 2021 was equal to roughly 312,500 Moons One BTC today is equal to roughly 91,000 Moons
Meaning the price of moons have increased 3.41x against BTC over the same time period.
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TLDR: Whenever you look at crypto and want to see how an asset has performed over a given period of time use the X to BTC ratio not just the price, this will help you see how your asset is performing relative to the greater crypto market.
submitted by /u/GabeSter
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