fiat currencies</strong></a>.</p>\n<p>One of the key benefits of owning digital gold currencies is that it can be easily cut up into any amount which is not possible with real-life gold bars. </p>\n<p>There are also downsides to gold-backed cryptocurrencies. These types of digital assets often come with low <a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-liquidity/">liquidity, issues with the verification of gold reserves, and reliance on a central authority. The latter becomes a significant issue since gold-backed cryptocurrency could possibly lose its credibility as a cryptocurrency since it is not completely <a href=https://www.bitdegree.org/"/crypto/learn/crypto-terms/what-is-decentralized-currency/">decentralized./nMost of the gold-backed cryptocurrencies are available on the <a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/buy-ethereum-eth/">Ethereum platform, although there are always some exceptions.</p>\n<p>The top gold-backed cryptocurrencies on the market today are Paxos Gold (PAXG), Perth Mint Gold Token (PMGT), Digix Global (DGX), Tether Gold (XAUT), and Meld Gold. PAXG is one of the few exceptions that are not part of ERC-20.</p>","level":"easy","meta_title":"What is Gold-Backed Cryptocurrency? Definition & Meaning | Crypto Wiki","meta_description":"Gold-Backed Cryptocurrency meaning: Gold-Backed Cryptocurrency - is a coin or a token that holds the value of a set amount of gold.","meta_keywords":null,"language":"en","created_at":"2022-03-15T15:16:13.000000Z","updated_at":"2022-05-13T14:32:23.000000Z","preview_url":"https://www.bitdegree.org/crypto/learn/crypto-terms/what-is-gold-backed-cryptocurrency"},"prevSection":{"id":9205,"original_id":null,"author_id":42,"translator_id":null,"title":"What is Fear and Greed Index?","slug":"what-is-fear-and-greed-index","section":"F","keyword":"Fear and Greed Index","status":"published","definition":"an index measuring the sentiment of the crypto market based on market trends and social signals.","content":"<p><a href=https://www.bitdegree.org/"https://www.bitdegree.org/cryptocurrency-prices/fear-and-greed-index/">The Fear & Greed index</strong></a> essentially indicates how two human emotions – fear and greed – influence the crypto market dynamics. It goes from 0 to 100, where <strong>0 represents \"extreme fear\" while 100 represents \"extreme greed.\"</strong></p>\n<p>The original Fear and Greed index was created for the stock market by <strong>CNN Money</strong>. It was created to determine whether certain markets or commodities were trading above or below their alleged values out of greed or fear, respectively.</p>\n<p>The factors used to determine the Fear and Greed index in the stock market include stock price momentum, stock price strength, trading volumes, put and call options, junk bond demand, volatility, and safe haven demand.</p>\n<p>As for the Fear & Greed index in the crypto market, rather than relying on technical factors like most indicators do, it relies on psychology. Thus, the Fear and Greed index might indicate a fearful market even when the crypto market itself is relatively good based on its technical aspects. Besides, note that <strong>the Fear & Greed index does not reflect the prices of crypto assets</strong>.</p>\n<p>There is a variety of indexes created for <a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/buy-bitcoin-btc/">Bitcoin, <a href=https://www.bitdegree.org/"https://www.bitdegree.org/crypto/buy-ethereum-eth/">Ethereum, and other big assets. So, if you're wondering <strong>what is Bitcoin Fear and Greed index</strong>, it is an index created to specifically measure the sentiment towards Bitcoin in the crypto market. Though, it's important to note that Fear and Greed indexes created based on Bitcoin (or other major crypto assets, for that matter) can also be used to indicate the sentiment of the whole crypto market.</p>\n<p>Talking about factors that are used to calculate crypto Fear and Greed indexes, they might differ based on the index itself. <a href=https://www.bitdegree.org/"https://www.bitdegree.org/cryptocurrency-prices/fear-and-greed-index/">The BitDegree crypto fear and greed index</strong></a>, for example, takes into consideration such aspects as market momentum / volume, volatility, trends, Bitcoin dominance, and different social signals. Most other crypto Fear and Greed indexes use the same indicators.</p>\n<h2>How to Use the Fear and Greed Index?</h2>\n<p>To understand how to use the Fear and Greed index, it's important to understand what fear and greed symbolize in the crypto market.</p>\n<p>The \"fear\" part of the index goes from 0 to 50. When there is fear, traders rapidly sell off their crypto assets. Besides that, they become less sensitive to price drops. <strong>Thus, fearful markets are frequently viewed as a good buying opportunity</strong>.</p>\n<p>The \"greed\" part of the index goes from 50 to 100. Greedy markets indicate that traders are overconfident in the price of an asset and are purchasing in large quantities. <strong>Therefore, markets that are overly greedy are typically seen as a good opportunity to sell</strong>.</p>\n<p>So, the essence of using the Fear and Greed index is making decisions that are the opposite of the market sentiment.</p>\n<p>Besides, it's useful to put the Fear and Greed index next to a price chart of an asset in question. <strong>It helps to predict upcoming price reversals</strong>. A price reversal almost always occurs right before the market sentiment reaches high fear, whereas a price crash almost always occurs right before the market sentiment reaches high greed.</p>\n<p>However, always make sure to approach the Fear and Greed index, or other types of indicators, with caution. Also, it's beneficial to use more than one indicator before making any important decisions.</p>","level":"easy","meta_title":"What is Fear and Greed Index? Definition & Meaning | Crypto Wiki","meta_description":"Fear and Greed Index meaning: Fear and Greed Index - an index measuring the sentiment of the crypto market based on market trends and social signals.","meta_keywords":null,"language":"en","created_at":"2023-03-27T07:48:55.000000Z","updated_at":"2023-04-04T12:36:28.000000Z","preview_url":"https://www.bitdegree.org/crypto/learn/crypto-terms/what-is-fear-and-greed-index"},"currentChapter":"G","currentSection":"what-are-gems","chapterTitle":"G","readingLevel":"easy"},"url":"/crypto/learn/crypto-terms/what-are-gems","version":"cdd198d50cbe5c9c21c9329d7c096ffc"}" class="container-fluid d-flex crypto-book p-0"> Crypto Terms: Letter G
What are Gems?
Gems MEANING:
Gems -
undervalued low-cap coins whose value will gradually increase over time.
Let's find out Gems meaning, definition in crypto,
what are Gems,
and all other detailed facts.
Gems are coins that are not being noticed at the moment but will grow in value in the future.
To put this in perspective, consider this - the top cryptocurrencies that are on the current market were once considered gems. For example, when Bitcoin first came around, almost no one saw its potential value. But the few ones that did, received tremendous rewards.
Generally, gems come in the form of coins or tokens with low market capitalizations. As more and more people discover the gem, the trading volume increases. Gems usually have scarcity mechanisms in place like a hard cap or a deflationary model. Yet some gems can be inflationary.
There are only a few criteria that can help you recognize a gem. It includes their market cap, volume, supply, and fundamentals.
In order to see how valuable a project could be in the future, before anything else, you need to perform a fundamental analysis. Don’t forget to consider that some factors can only be detected by outside expertise.
During your research, ask yourself these questions:
- Will this project create a big impact?
- What are this project’s key advantages and disadvantages?
- How competent and experienced is the team behind this project?
Gem hunting is a risky endeavor since more often than not the coins exponentially drop in value instead of growing.
