🔍 What is FDV and why does it matter?
You see a token at $0.01 with a market cap of $10M and think "cheap"? Hold up. Check out the FDV — Fully Diluted Valuation. This is the real valuation of the project if all tokens were in circulation.
FDV = current price × total token supply (including locked tokens). Market Cap = price × circulating tokens right now. The difference can be massive 📊
Example: a token is priced at $1, with 100M tokens in circulation (Market Cap = $100M), but total supply is 1B tokens. FDV = $1B! This means that when the tokens are unlocked, the price could tank significantly.
It's especially risky when FDV is 10-50 times greater than Market Cap. This signals incoming sell pressure. Investors and the team will be dumping unlocked tokens, which inevitably presses down on the price.
Golden rule: if the FDV is already huge (tens of billions for a new project), then the growth potential is limited. You're not buying at a "cheap" price, but at an inflated one relative to actual supply.
Always check the FDV on CoinGecko or CoinMarketCap before buying. This will save you from nasty surprises 💡
What do you consider an acceptable gap between Market Cap and FDV for investments?
#FDV #TokenAnalysis #CryptoEducation #MarketCap #DYOR
You see a token at $0.01 with a market cap of $10M and think "cheap"? Hold up. Check out the FDV — Fully Diluted Valuation. This is the real valuation of the project if all tokens were in circulation.
FDV = current price × total token supply (including locked tokens). Market Cap = price × circulating tokens right now. The difference can be massive 📊
Example: a token is priced at $1, with 100M tokens in circulation (Market Cap = $100M), but total supply is 1B tokens. FDV = $1B! This means that when the tokens are unlocked, the price could tank significantly.
It's especially risky when FDV is 10-50 times greater than Market Cap. This signals incoming sell pressure. Investors and the team will be dumping unlocked tokens, which inevitably presses down on the price.
Golden rule: if the FDV is already huge (tens of billions for a new project), then the growth potential is limited. You're not buying at a "cheap" price, but at an inflated one relative to actual supply.
Always check the FDV on CoinGecko or CoinMarketCap before buying. This will save you from nasty surprises 💡
What do you consider an acceptable gap between Market Cap and FDV for investments?
#FDV #TokenAnalysis #CryptoEducation #MarketCap #DYOR