A project’s market cap may look low, so why do some people still say it’s overvalued?
First, a definition: circulating market cap ÷ FDV roughly represents the current circulating supply ratio. The lower this ratio, the more tokens remain to be released in the future.
The reasoning behind this: looking only at circulating market cap can lead you to underestimate the token’s overall valuation. If there isn’t enough demand to absorb the tokens released in the future, the price may come under pressure.
$BTC has a maximum supply of 21 million tokens. Most of them have already been issued, so its market cap and FDV are not far apart.
Don’t rush into a decision just because everyone else is buying.
First, a definition: circulating market cap ÷ FDV roughly represents the current circulating supply ratio. The lower this ratio, the more tokens remain to be released in the future.
The reasoning behind this: looking only at circulating market cap can lead you to underestimate the token’s overall valuation. If there isn’t enough demand to absorb the tokens released in the future, the price may come under pressure.
$BTC has a maximum supply of 21 million tokens. Most of them have already been issued, so its market cap and FDV are not far apart.
Don’t rush into a decision just because everyone else is buying.
