Bitrabo Editorial
Analyzing Profitability of XRP, Dogecoin, and Other Cryptocurrencies
Santiment delves into the comparison of major cryptocurrencies like XRP, Bitcoin, and Dogecoin in terms of supply profitability in a recent analysis.
Supply in Profit reflects the percentage of a cryptocurrency’s circulating supply that currently holds a net unrealized profit, according to Santiment’s on-chain analytics.
Unlike other metrics, Santiment’s indicator determines profit or loss by comparing the current price against the token’s initial mining cost, not just the last transaction price on the blockchain.
This approach identifies assets mined at prices higher than the current market value as being at a loss, while those mined at lower prices are considered profitable.
The Supply in Profit metric calculates the percentage of the total circulating supply that falls under the profitable category.
Here’s an illustration of the trend in Supply and Profit for several prominent cryptocurrencies in recent months:
The graph highlights Cardano (ADA) as the least profitable among the listed coins, with only 53.5% of its tokens in profit. XRP and Dogecoin follow with 78.84% and 82.16% respectively, while Bitcoin and Ethereum lead with 98.3% and 95.1% profitability.
When it comes to XRP’s price, it currently hovers around $0.52, seeing a 1% increase in the past week.
Implications of Supply in Profit for Cryptocurrencies
A high supply in profit indicates a higher likelihood of a potential selloff, suggesting that extremely profitable coins may be nearing a local peak. Conversely, assets with lower profitability, such as XRP and Dogecoin, may have more room for growth before significant profit-taking pressures.
In response to MATIC’s position in this metric, Santiment suggests that its lower profitability could be attributed to its introduction during the 2019 bear market, putting it at a comparative disadvantage from the start.
Understanding the Supply in Profit metric provides valuable insights into the market dynamics and potential future trends for various cryptocurrencies.