Circulating Supply vs. FDV 📊
• Circulating supply is the number of tokens currently available on the market, so market cap is calculated as price X circulating supply.
• Fully Diluted Valuation (FDV) calculates the value of the asset if all possible tokens were in circulation.
This difference is important because FDV can suggest that token will have a much larger Market Cap in the future than what's currently being traded
🔍 If a project's circulating supply is small compared to its total supply, there may be many tokens that are locked or have yet to be released.
When these tokens enter the market, they can increase selling pressure and affect the token's price. For example, a token may look cheap now and its market cap may look small, but if significant token releases are coming, the price may not stay that way 📉
Some tokens have a very small market cap to FDV ratio of < 0.1. This means that the current market cap will increase due to future unlocks, while the price will likely dump due to selling pressure. A good example is Worldcoin $WLD 🤑
Market cap is $2.3 billion while FDV is $30.4 billion. This is not a token you want to hold long term
