Sort five crypto assets into categories by what, if anything, supports their price.
Open a blank spreadsheet, or rule a sheet of paper, into five columns headed asset, category, what supports the price, what would make it fall sharply, and source. Leave space under each row for a few extra lines. Filling it in for five crypto assets takes about 20 minutes.
The markets page of any crypto exchange shows why the columns are needed. Hundreds of names run down a single list, ordered by trading volume or by how far the price has moved. Bitcoin, a stablecoin pegged to the dollar, and a token launched last month with a dog on its logo appear in neighbouring rows as though they were the same sort of asset, when they are quite different. Your sheet sorts five of them by what, if anything, supports the price.
The categories come from the earlier lessons in this module. A native coin is the coin a blockchain uses to pay its own fees and to reward the people securing it. Bitcoin and ether are both native coins, and their prices rest on demand for the network and for the coin.
A reserve-backed stablecoin is a token whose issuer says it holds cash and short-term assets so it can redeem every coin at its peg. An algorithmic stablecoin tries to keep its peg with code and a linked token, and has no reserves behind it.
A utility or governance token is used to pay for something inside a product, or to vote on how a project is run. A meme token exists mainly for fun, community or speculation, and either says so openly or barely pretends otherwise.
Some assets fall between two categories. Pick whichever fits better and add a note saying where the overlap lies. You are trying to understand what keeps the price where it is, and the note records that more usefully than a debate over which label is correct.
Your five must include bitcoin or ether, at least one stablecoin, and at least two tokens you have seen promoted or heard friends talk about. If you own any crypto, put your holdings on the list as well. Nothing here requires you to buy anything, and the exercise does not suggest that you should.
For sources, use what each project publishes about itself. A native coin has an official site and technical documentation. A stablecoin has the issuer's site and its most recent reserve report; Lesson 2.2, "Stablecoins: what holds the peg and what breaks it", shows how to find that report and which questions to put to it. For any other token, read the whitepaper and the page that lays out supply and allocation.
Social media threads, video summaries and price-tracking sites are fine for seeing which assets people are talking about. Leave them out of your source column, because they pass claims along without checking them. A thread or video calling a stablecoin "fully backed" proves nothing about its backing. The closest you can get to evidence is the issuer's reserve report, read with the Lesson 2.2 questions in hand.
For every asset, enter a category, one or two sentences on what supports the price, one sentence naming a specific event that would send it down sharply, and the source you used. If it straddles two categories, record the nearer one and note the overlap.
The risk entry has to belong to that asset in particular. "Market risk" does not count, since it could be written against anything. Entries that work look like "the reserves might not be there" or "insiders hold half the supply and can sell next quarter". Lesson 2.3, "Tokens, DeFi and the questions to ask any of them", lists the questions that bring out risks such as how much supply insiders hold and when they are allowed to sell it.
The course has already covered the three assets below, so you can compare these rows with what you learned earlier.
Bitcoin goes in the native coin category. Demand from people who want to hold it supports the price, alongside a fixed supply schedule, and it produces no cash flow; Lesson 1.3, "What gives bitcoin a price, and why it swings", sets this out. A broad drop in demand, from a shift in sentiment or in regulation, would send it down sharply. The source for its supply rules is the bitcoin project's own documentation.
Ether is a native coin too. Its price is supported by demand to use Ethereum, since each transaction needs ether to pay for gas, and by demand to hold and stake it. A sharp fall could come from users leaving for other networks, a serious flaw in the protocol, or a drop in demand for crypto generally. Ethereum's official documentation is the source.
TerraUSD, as it stood in early May 2022, was an algorithmic stablecoin. The swap mechanism with Luna held its price up, together with confidence that the mechanism would keep working. The risk was heavy selling greater than the mechanism could absorb, and that is what happened. The source is the project's own documentation from that time, read alongside Lesson 5.1, "Terra and Luna: a peg held up by an algorithm".
The last step is to go back through each asset and write down every claim you were unable to confirm from a primary source, with each claim on its own line. People skip this step easily, and it is the one most of them learn the most from.
Gaps you might record include a reserve report that is months old, a supply page that doesn't say when team tokens can be sold, and project documents that don't name the people running the project.
With all five rows complete, read down your gaps and set them against how heavily each asset is promoted. The assets with the most unverified claims are usually the ones promoted most loudly. Module 5 covers the firms that failed in 2022, and you will see the same pattern there.
Your finished sheet has five rows. Each row has a category, one or two sentences on what supports the price, one sentence on the biggest risk, a source you could hand to someone else, and a note of anything you could not verify. Begin with the asset you know least about, because that row will teach you the most.
Fill in the classification table for five assets. For each one, give your source and one sentence on its biggest risk.
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