Why is it important for investors to consider the fully diluted market cap of a cryptocurrency?
Tilahun AshnfiDec 16, 2021 · 3 years ago3 answers
What factors make the fully diluted market cap of a cryptocurrency an important consideration for investors?
3 answers
- Dec 16, 2021 · 3 years agoThe fully diluted market cap of a cryptocurrency is an important consideration for investors because it provides a more accurate picture of the potential value and growth of the cryptocurrency. Unlike the regular market cap, which only takes into account the circulating supply of coins, the fully diluted market cap includes all the coins that could potentially be in circulation. This is particularly relevant for cryptocurrencies with a large number of coins that are yet to be released or are locked up in contracts. By considering the fully diluted market cap, investors can better assess the long-term potential of a cryptocurrency and make more informed investment decisions.
- Dec 16, 2021 · 3 years agoInvestors should pay attention to the fully diluted market cap of a cryptocurrency because it reflects the maximum value that the cryptocurrency could potentially reach. It takes into account all the coins that could be in circulation, including those that are not currently available. This is important because it gives investors an idea of the future supply and potential dilution of the cryptocurrency. A high fully diluted market cap could indicate a larger potential market for the cryptocurrency, while a low fully diluted market cap could suggest limited growth opportunities. Therefore, considering the fully diluted market cap can help investors evaluate the investment potential and make more informed decisions.
- Dec 16, 2021 · 3 years agoWhen it comes to investing in cryptocurrencies, considering the fully diluted market cap is crucial. The fully diluted market cap takes into account all the coins that could potentially be in circulation, including those that are not currently available. This provides a more comprehensive view of the cryptocurrency's potential value and growth. For example, if a cryptocurrency has a large number of coins that are yet to be released, the fully diluted market cap will be higher than the regular market cap. This means that the potential supply of the cryptocurrency is larger, which could impact its price and market dynamics. Therefore, investors should consider the fully diluted market cap to better understand the investment opportunity and potential risks associated with a cryptocurrency.
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