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š A New Metric To Find NFT Bargains
Introducing the Popularity To Floor Ratio (PTFR) and using it to find NFT bargainsā¦
Over the past months, Iāve been following the FxHash marketplace closely by doing market analyses every week. Thanks to that, Iāve noticed a pattern in NFT collections suddenly rising in value. Popularity over time was a key factor.
If you are still learning about NFTs and all the basic terms I use, you should read this first How To Crunch The Numbers Behind NFTs.
How can we spot these bargains early? My thesis is simple. There are many popular collections, and those that remain popular over a long period have the potential to āexplodeā in price. Is there a way to see if they are undervalued compared to their popularity? I created a pair of metrics that try to answer this question.
I call it Popularity to Floor Ratio (PTFR), and it uses the volume to measure the popularity and the floor as a price measure. Some collections have way more supply than others, so I created a second flavor that factors in the supply ( PTFRwS).
Popularity To Floor Ratio (PTFR) = Total Volume / Floor
