Let's talk about FDV and MC surpassing Solana through Worldcoin FDV｜Why should long-term investors pay more attention to FDV? WLD's current price has risen to this level.

Discussing the Worldcoin FDV surpassing Solana and the relationship between FDV and MC | Why should long-term investors pay more attention to FDV?

The current price of WLD has risen to this level. Is it reasonable, and is there still room for further growth in the future? This is the most concerning question for everyone.

This requires us to pay attention to the logic related to FDV, MC, and token supply.

In fact, even many old OGs still do not know how to use specific values to make decisions for their investments or trades.

First, FDV and MC are the biggest smokescreens in the cryptocurrency industry. Many people believe that only market cap matters, but I always feel that FDV is a more important indicator.

I. What are FDV and MC?

FDV stands for fully diluted valuation, which means: total token supply × current token price = current total market value;

MC = Market Cap, which refers to the circulating market value, meaning: current price × total amount of currency issued = circulating market value;

Market cap is always less than or equal to FDV; compared to market cap, FDV is larger because "market cap" only calculates the tokens that are currently tradable (i.e., in circulation), while ignoring certain locked tokens that have not been granted or unlocked.

Usually, these locked tokens come from a variety of different categories - they can be team tokens and investor tokens, so they are relevant in the coming weeks to years, or they can be tokens in a mining plan that will be issued over the next 100 years.

Market cap is an indicator of public purchasing demand, while FDV is not an indicator of demand at all. If the market demand for unlocked tokens increases, then FDV will increase proportionally.

II. What is the use of understanding these?

Understanding market cap and FDV is very important. You can determine whether the current price is in a reasonable range and compare them with similar projects.

If you see a significant difference between market cap and FDV, it means that many tokens are locked and waiting to enter the market. You should investigate how they will enter the market to judge whether the current price is reasonable.

If the market cap is 10% of FDV and the tokens will be issued next year, then the project needs to grow 10 times or 1000% within a year to maintain its current price.

However, if the market cap is 25% of FDV and the tokens will be released over 4 years, then there will only be a 4-fold increase or approximately 40% year-on-year growth over 4 years.

For example, the current market cap of WLD is less than 1 billion, but the FDV has already exceeded 70 billion. The market cap only accounts for 1.5% of FDV. Everyone can calculate how much the project needs to grow to maintain the current token price!

Therefore, the ratio of market cap to FDV is one of the first things to check to provide clues about the supply. Once you do this, you will want to delve into the true meaning of circulating supply and maximum supply.

Many projects now have a low circulating market value, but the tokens are constantly being released. Projects like this actually need to pay attention to the ceiling of the rise and potential risks.

III. Look at MC in the short term and FDV in the long term; especially for new tokens, you must look at FDV

For a long time, most projects in the cryptocurrency industry have had high FDV market caps. The dynamics of FDV and MC need to reach a good balance for better development. In addition to fundamentals, the price of new tokens depends on the dynamics of FDV and MC.

For example, if you are speculating on short-term popularity, you only need to look at MC, and you don't need to look at FDV. If you are holding a project for the long term, you must look at FDV.

So, before investing, let's calm down and think:

If a project has a fully diluted valuation higher than some of the big tech companies in the world, it may be worth considering who holds this huge new wealth, at what price they got it, and who they will sell it to.

Let's talk about FDV and MC surpassing Solana through Worldcoin FDV｜Why should long-term investors pay more attention to FDV? WLD's current price has risen to this level.

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