$PERP
Many investors see a token trading at $0.02 and think,
“If it reaches $1, I’ll make a fortune!”
This is a common misconception among beginners. The token’s price alone offers little insight into its true potential. The more meaningful metric is its market capitalization, calculated as:
Market Cap = Token Price × Total Supply
For example, a token priced at $1 with 100 million tokens in circulation has a $100 million market cap. Conversely, a token priced at $0.001 with a supply of 1 trillion tokens already holds a $1 billion market cap — ten times larger.
Therefore, a low price does not necessarily indicate a bargain.
Why the "$1 Dream" Is Misleading
Many speculate that a low-priced coin can eventually reach $1. However, moving from $0.01 to $1 might require billions in capital inflows — in some cases, more than Bitcoin’s entire market cap. Such scenarios are usually unrealistic.
How I Personally Use Market Cap
To make fair comparisons
A $500 token could have a smaller market cap than one priced at $0.01.
To avoid price-based traps
I no longer assume a low price equals value. I ask how much capital would be needed to reach higher valuations.
To identify real opportunities
Small-cap projects with strong fundamentals often offer greater growth potential than overhyped large caps.
Bonus Insight: Monitor Circulating Supply
Some projects release tokens gradually. When additional supply is unlocked, prices often decline.
Always look deeper than the price tag — understand the tokenomics.
