Why Are Your Altcoins CRASHING!? FDV Explained!!

Bitcoin has been rallying hard but most Altcoins have been lagging and this has Left many of us wondering why but why Why well it's becoming clear that one of The answers is something that most Crypto holders Traders and investors Overlook when doing their research So Today we're going to tell you about this Important factor explain how it's been Impacting crypto prices and show you What you can do to ensure that your bags Don't suffer because of this phenomenon Okay my friends we need to talk about Tokenomics now it may not be the most Exciting Topic in crypto but Overlook it At your peril pump or dump the fate of The cryptos you're holding is written in Their tokenomics so you'd better take an Interest now when I say tokenomics the First thing you might think of is market Cap and we all know that the larger the Market cap a crypto has the more money That's needed to move its price and vice Versa but if your interest in tokenomics Ends there well good luck making money In crypto if you really want to know how This game is played you need to study Fdv or fully diluted valuation the fully Diluted valuation of a crypto is what You get when you multiply its price by Its maximum Supply often the maximum Supply refers to tokens that are locked Out of circulation and unable to be sold On the open market until of course they

Are unlocked one day now because maximum Supply and FTV conjure up some future Event token unlocks it's very easy to Underestimate their importance in the Short term after all it could be weeks Months or even years before new Supply Hits the market and if you're a Trader Looking for short-term opportunities This Dynamic may not concern you all That much but if you're an investor with A medium to long-term time Horizon you You should be wary of cryptos with an Fdv that is high relative to their Initial circulating Supply or float now To understand what this means let's Check out some examples of cryptos that Fit the high fdv low float description We are in fact spoiled for Choice here But let's go with say Wormhole now at The time of making this video wormholes W token is trading at just over 59 Cs And the C calculating Supply is 1.8 Billion W this gives Wormhole a market Cap of around1 B65 million and if you Want to work from this information alone You might think $1 billion market cap That suits my risk tolerance with a Market cap like that it might pump three Five maybe 10x from here but this is Where you need to be careful the max Supply of w is 10 billion meaning that Only 18% of all W tokens are currently On the open market the current price of Around 59 cents is the result of supply

And demand based on a temporarily scarce 18% tranch of all the W tokens that Actually exist the remaining 82% will be Unlocked over the next 4 years meaning a Large number of them could be sold on The open market the question then is Whether there will be enough buyers Willing to pay the same price or ideally More for a token whose Supply stands to Increase more than fivefold at the Moment W's fdv is around5 B930 million so if you're hoping to see This token 10x over the next few years Make sure you have your maths right it's Not the billion doll current market cap That you should be multiplying but the Fdv of almost $6 billion when when the Entire Supply is circulating a 10x will Put w at almost $60 billion crazier Things have of course happened in crypto But that is nevertheless an extremely High valuation it's about the same as The combined current market caps of xrp ADA and avac and it's a much taller Order than praying for a 10x from a 1 Billion to A10 billion market cap Wormhole is a good example of of the High fdv low float model that has become The standard for newly launched cryptos That are backed by a lot of big Venture Capital money however W is certainly not Unique in this respect and we haven't Singled it out for any particular reason Other Classics in the high fdv low float

Genre include sui Ono Celestia starnet Athena and Jupiter but we can't conclude This section of the video without Discussing the piesta resistance and That is World coins Wld there is nothing quite like It are you ready for Deals are you ready for trading fee Discounts are you ready to save some Money if the answer is yes then you're Ready for the coin Bureau deals Page yes coin Bureau brings you the very Best deals and promotions in all of Crypto you won't find offers like these Anywhere Else discounts on the best hardware Wallets Exchange sign up bonuses of up To $60,000 trading fee discounts of up to 60% coin bureau's brand new altcoin Focus Subscription Service the coin Bureau deals page is even better for you Than this piece of succulent protein Rich nutritious grilled chicken [Music] Head on over to coin bureau.com Deals or click the link in the Description below don't delay check out The coin Bureau deals page today these Deals are so hot I need to cool [Music] Down Yeah worldcoin has a circulating supply Of around

227 million wld and a total supply of 10 Billion wld for the maths of ver that Means that just over 2.27% of all the wld that exists is Actually in circulation the demand for This extremely low float currently gives Wld a market cap of around 1 billi $130 Million and a price of around $44.97 and this means that the fdv of Worldcoin is drum roll please $60 Billion at the time of making this video Emissions from Grant and operator claims Are increasing wld Supply by around 0.6% a day but wait it gets better Starting in August 2024 token unlocks And emissions from World coins team and Venture capitalists will create wld Inflation of around 4% per day Common Sense suggests that Holding on to an asset subject to 4% Daily inflation is a bad idea and so These unlocks and Emissions are likely To be sold with haste before Supply Outstrips demand if this is indeed the Case then we can expect sell pressure of Up to around $40 million per day based On the current price of Wld so this begs the question of what World coins price action is going to Look like in the future let's just put It this way good luck getting a 10x out Of a crypto currently valued at 60 Billion and by the way if you're Enjoying this video so far make sure to

Whack that like button so that more People can see it subscribe to the Channel and turn on your bell Notifications so that you never miss Another upload not surprisingly the high Fdv low float meta has stirred up plenty Of controversy online and big players Have been weighing in back in May Binance research published a report on The topic subtitled how did we get here Echoing a sentiment shared by many in The community the report cites data Showing that the average float for newly Launched cryptos fell from 41% in 2022 To 12.3% in 2024 however this particular statistic Was emphatically dismissed by one VC as Dragonfly Capital managing partner hasb Keshi put it quote I'm I'm sorry what my Brother in Christ I was around in 2022 Projects were not launching with Circulating supplies of 41% he claimed that this figure was Inflated by the inclusion of quote Random corporate coins and non day one Listings has pointed to Lido's ldo and Osmosis is osmo both of which had been Around for more than a year prior to Their binance listings the implication Here is that their listing day float was Comparatively High because by that time They had already seen a year or more of Token unlocks and Emissions now this is An interesting take but it would be good

To have more data on this before drawing Any conclusions about the significance Of that 41% figure in the binance report However hasb also supports his argument By pointing to a list of older major Cryptos with low float percentages Shared by Doug kulit a crypto founder The list shows soul ARB uni Nia Pendle B And ax launched with floats between 12 And 16% avac 1-in IMX at 4 to 6.5% and a few outliers like dot at 37% And Mina at 1.2% while this list is by no means Exhaustive it shows that some of the Biggest crypto projects from previous Cycles most of which have survived and Become well established shared the high Fdv lowf float model that has come under So much scrutiny of late this suggests That this model isn't a new phenomenon And for that matter hasb argues it's not Even a crypto specific one he compares The average float of binance listings Year-to date which is 12.3% to the Median day one IPO float on the stock Market in 2023 which was 12.8% news flash they're not that far Off in fact this fdv Tom Foolery seems To be standard practice in trafi haseb Also addressed the performance of the Low flat High fdv cryptos launched on Binance so far this year in response to Data showing that some 80% of them are Currently in the red haseb argues that

This can't be due to bigname VCS dumping Their shiny new tokens onto exchanges as None of the newly launched cryptos in Question have had their VC allocations Unlocked yet as he explains top tier VCS Who are also o under SEC supervision are Bound by its rule 144a to have a cliff Of at least one year and a multi-year Vest before they get their tokens Instead haseb suggests that new Launches On binance simply followed the rest of The market when it dumped in April Ostensibly in response to geopolitical Tensions in the Middle East while the Price of BTC has since shown strength Altcoins in general have been painting Ugly charts in recent weeks this Suggests that if there is a problem it's Not particular to newly launched low Float high fdv cryptos so in fact the Picture may not be quite as black and White hb's arguments call into question Simplistic narratives about the low Float and high fdv model like the one That identifies the memec coin season of Q1 as a Revolt of retail investors newly Savvy to fdv Dynamics but at the same Time it would be unwise to deny that There is any problem at all with the Lowf float High fdv meta sure unlocks Emissions and VC dumping might not be Responsible for the lackluster price Action from new launches right now Because again the unlocks haven't begun

Yet but in the longterm this model Appears unsustainable and that's because Everyone is doing it according to an Estimate in the binance research report Approximately $155 billion worth of Tokens will be unlocked from 24 to 2030 Without an equal influx of buy side Demand and capital flows it's not clear How the tokens in question will be able To maintain their current prices let Alone appreciate in value on the other Hand demand for digital assets has grown Tremendously in the last decade so Projects launching with increasingly Large ftvs is hardly surprising and as We've seen low floats themselves are not New but it's also Al true that many new Projects are launching at EV valuations That can't be justified by any Fundamental analysis of the project or Public market demand for it this is a Symptom of what crypto Elder Statesman Kobe called in a recent essay the Phantom Market the essay is well worth a Read by the way so we'll drop a link to It in the description for you to check Out later anyway after Regulators Brought the Ico era of the mid-2010s to A close fundraising for crypto projects Moved to a VC Reliant model where prices Are determined by the absolute highest Price any VC is willing to pay there is Now a crowded field of top tier crypto VC firms with Deep Pockets surrounded by

Countless smaller VCS eager to copy Their trades the result is a phantom Market that Kobe says is either Delusional rigged or both it's a race to The bottom where VCS don't seem to care About bidding for tokens at exorbitant Ftvs because their returns while Diminishing are still astronomical Compared to buying at post launch market Prices this means that anyone who Doesn't have access to token pre-sales And fundraising rounds is by definition A late buyer AKA exit liquidity there is No being early to cryptos like these as Kobe put it quote all of the upside has Already been captured by the private Market once a Once Upon a Time icos and VCC DRS courted less demand meaning that Cryptos still had room to grow after Their launch on the public market where They could be repriced according to Supply and demand but those days are Behind us and it seems that all of a new Crypto's price Discovery takes place in Private funding rounds Kobe demonstrates This by comparing the returns of cedr And public market investors in four Major crypto launches over the years eth Soul op and St strk so those who Invested in the ethereum Ico enjoyed Returns 1.5x higher than those available On the public market salana seed Investors saw returns 10x higher than Those of public market buyers for

Optimism the seed round returns were 30X Higher than those available on the Public market while for stocket seed Round investors are up 1338x while almost all public market Buyers have lost money St strk is down About 40% since launch day now if you Are wondering how token locks fit into All of this allow us to explain there is An active OTC market for locked tokens That can continue long after a token has Launched on the public market post Listing early investors are inevitably Up a heck of a lot and desperate to Realize their mad gains in OTC trades VCS agree to transfer their tokens upon Unlock using trust and legal enforcement As their guarantees since the tokens Being traded are locked they generally Sell at a discount and as the sellers Are VCS who bought in right at the Bottom they might not be too sensitive About their exit price the bigger the Discount in the Phantom Market is the More brutal token unlocks will be for Unsuspecting retail investors who bought In on exchanges at a low float and high Fdv as soon as those tokens unlock their Holders are likely going to be Market Selling as fast as possible tanking the Token price in the process notably the Phantom market and its dislocated token Prices create pressure on teams to Maintain the overinflated valuations of

Their projects post launch because who Wants their projects token to have Horrible price action and of course the Easiest way to maintain a high valuation Is to create AR official scarcity by Launching at a low float and thus the Cycle continues and this is how we ended Up with worldcoin now as we saw earlier There are major cryptos that launched With a low float and went on to be very Successful the story of soul for example Is enough to give anyone hope after Launching in 2020 with a low float it Dumped around 35% within 2 months then Soul had a massive unlock in January 2021 that brought almost all coins into Circulation fortunately this unlock Coincided with an enormous influx of Retail investors into crypto and soul Spent most of the rest of the year in a Parabolic rally perhaps this is an Exceptional case but it goes to show That unlocks have to be understood in The context of market conditions rather Than in isolation conversely however not Adhering to the lowf flat High fdv model Isn't necessarily a good predictor of Market performance there is a long list Of dinosaur coins whose market caps are Now too small for us to mention that Began life as something resembling a Fair launch and even this couldn't save Them from Extinction many other major Cryptos that have survived more than one

Or indeed two cycles are still on life Support a very long way below their All-time highs take dot for example Again reasonable valuations and float Did little to help some of these coins Then there are those projects that forgo VC funding for one reason or another if You sick of the low float High fdv meta Then you might find this appealing but Consider that this is an attention game And projects that don't have substantial Financial backing May struggle to gain And keep traction with minimal resources To spend on luxuries like for instance Marketing and comms so next time you're Doing your your own research on a crypto Project that you might invest in you Should absolutely investigate tokenomics And consider avoiding cryptos with Extreme valuations and minuscule floats You can even sort cryptos by their fdv To market cap ratio on coin Gecko and Take names and numbers if you feel like It and we can't make it to the end of This video without giving a special Mention to token unlocks we've no Affiliation with this site but it is an Extremely useful resource for tracking Token unlocking and vesting schedules For example at the time of making this Video a quick glance at token unlocks Shows us that one crypto is about to Have 12% of its total Supply unlocked in A few hours I mean it could be a bullish

Unlock but on the other hand it wouldn't Be the worst idea to wait and see how The market reacts before making an Investment decision however you Interpret the tokenomics of a crypto You're looking at just remember that a Holistic approach to research will pay Off you may find a project with Wholesome tokenomics but if it doesn't Belong to a hot narrative will anyone Care if it has a high price tag will a New wave of inexperienced retail Investors want to buy it if it's already A top 10 crypto by market cap will it 10x from here now we are all of us Digging to find cryptos that tick as Many boxes and raise as few red flags as Possible before the market violently Reprices them upwards sadly there are no Easy answers and you just have to arm Yourself with more knowledge and Experience than the person you are Hoping will buy your bags and that of Course is another excellent reason to Double check that you are subscribed to The coin Bureau and have your bell Notifications turned On right that's all for today's video Folks so if you learned something make Sure to Crunch the like button to help More people see this and if you think We're being unfair to worldcoin why not Let us know about it in the comments as Boys thank you for watching and I will

See you next time this is guy over and Out [Music]


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