Why "Low Float, High FDV" coins are risky
You might spot a crypto with a really low price and think, 'What a steal!' 🤯 But what if 90% of the supply is still locked up and ready to hit the market later?
You might spot a crypto like ApeCoin (APE) with a low price and think, 'What a steal!' 🤯 We often check its 'float' - coins currently available to buy.
Imagine a new cafe with only a few tables open.
But then there's 'FDV' (Fully Diluted Valuation), the total value if ALL possible coins were circulating, even locked ones.
This is like knowing the cafe has plans for 90 more locations later!
We get excited by the low float, picturing huge gains.
But, this low float often hides a huge FDV, meaning tons of tokens are waiting to unlock and hit the market, which can feel super confusing.
Therefore, while a low float sparks initial hype, that high FDV is a big red flag.
As those locked tokens unlock - often to early investors or the team - they flood the market, increasing supply dramatically.
This influx pushes prices down because there’s suddenly so much more to go around.
The big takeaway: always check both circulating AND total supply.
If FDV is vastly higher than the current market cap, prepare for potential dilution.
✨ You just saved yourself a potential headache and made a smarter decision!
#Tokenomics #CryptoEducation #FDV #CryptoTips #InvestingWisely - Disclaimer: Sharing knowledge and insights as part of learning and growing together. For educational purposes only, not financial advice.