People think that the project founder takes out big bags of money. 500ml and distributes it to the community as a drop on the listing.
And why did one project list with a cap of 1 billion, and the other 300 mln?
Alexander Sokolovsky (CEO X-Empire) will answer these questions
In reality, things work a little differently.
As an example, I opened several projects and will clearly show what is what.
#NOT🔥🔥🔥 , #Jupiter , #CATI . They are completely different in the distribution model, cape.
Open a coin on coinmarketcap
Indicator number 1 is market cap.
That is, the number of coins on the market multiplied by the price.
Besides there is FDV in the case of a note it is the same.
This is the number of coins that are in the market. Because not coin distributed all the coins on the listing itself and they are all in hand.
Let's compare it with another coin - Jupiter
Jupiter has a capitalization of 1 billion, and FDV is 7.5 billion. This means that Jupiter has 13% in the market, and the remaining 87% is locked in for several years.
This is the basis - what you need to look at. How many coins are in the market.
Let's move on.
Supply does not affect the price.
People in the chat wrote to me:
The more supply a project has, the lower its capitalization will be and the worse it will be for users.
Supply is essentially needed for the beauty of numbers. Each project determines for itself how many digits there will be after the decimal point.
For example
Not coin 102 billion coins and 700ml caps, then your $100 will look like - 12,000 coins at $0.0073
And Jupiter - 10 billion coins and 1 billion caps, the same $100 is already 135 coins at $0.74
The numbers are just prettier.
Where does the money come from in the project?
Let's take as an example a project where 75% of the coins belong to the community and 25% to the team, exchanges, etc.
Once the coins are distributed, day X arrives.
All these coins start to be sent to wallets, to exchanges where a clash of supply and demand occurs.
Some people go to sell and this creates pressure on the glass.
And the other part could be large players with money who did not mine, but they like the project and want to buy in order to sell it more expensive, they start buying and this is already pressure from buyers.
If demand exceeds supply, the price rises and vice versa.
Now the most interesting thing is why do projects roll back from their peak?
And why did not fly higher than cats?
It's simple - firstly, because there were more people who wanted to buy notcoin and they bought it longer. And the flow of people who wanted to buy cats was smaller.
Secondly, these are exchanges. For example, tier 1 exchange Binance or OKX
They have more buyers and whales and they hold a lot of money. They can buy longer and more. This creates capitalization and affects the pump of the project.
People ask why some enter the top exchanges and others do not?
Everywhere has its own Nances. It can be extremely difficult to negotiate with exchanges and agree on all the terms, so you have to choose. Which one to list on first.
Another misconception is that the more tokens a project distributes, the better.
When a project has given away a lot, people start selling and the pressure on the glass increases. The price falls.
And if they have given out little, many look at the small money and do not sell. Thus increasing the price of the coin.
Another example
Pump notcoin in spring.
As most people think - a black rock, whale or market maker comes and starts investing their millions buying up the coin.
But this is not true, no one does this, because the price can go even lower.
It is important that the market phase coincides.
Bitcoin soared in the spring, thereby pulling notcoin. Strong faith of buyers, so inflated the price.
That's why Dogz keeps falling, unlike Note. Negativity on the market, war in the east. The first person in the telegram - Pavel Durov has been detained. People are afraid to buy at such moments.
If you look at the dogz chart, it slides down, and does not go down like a candle - this means that there are 3-5% fewer buyers than sellers, and it is worth coming out with some good news and the number of buyers will rise by 5-7% and the whole rocket will fly up.
This is the balance of supply and demand. Everything is transparent and simple. This also applies to other markets. Real estate, the stock market and others.
I hope you will be able to more soberly assess the prospects of a particular project and draw the right conclusions.
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