If you are investing in cryptocurrencies, it is very important to know the difference between
Market Cap and FDV to protect your investment.
🔹 What is Market Cap?
The current market value of the currency =
Currency price × number of currencies currently available for trading.
It means it only counts the currencies that are actually available in the market.
🔹 What is FDV?
The total market value of the currency if all currencies were launched into the market =
Currency price × total maximum number of the currency.
it means it calculates as if all locked currencies have been issued.
⚠️ Where is the risk?
When the difference between FDV and Market Cap is large, it means that
There is still a huge amount of currencies that have not been released. When they are released later,
It can cause significant selling pressure and the price of the currency decreases.
💡 Why is this important for investors?
Because you might buy a currency that looks cheap and its market value
The phenomenon is low, but when the locked currencies start to enter
the market, its price suddenly collapses.
The smaller the difference between Market Cap and FDV, the more
The currency is safer for investment.
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