1) You have your eyes on a VERY promising presale.
You see the token price yet you you are totally clueless if this is actually expensive or not.
Here's how to calculate the REAL value 🧵👇
You see the token price yet you you are totally clueless if this is actually expensive or not.
Here's how to calculate the REAL value 🧵👇
2) Let's start of with the basics and teach everyone that a LOW token price doesn't mean low value.
Neither does a HIGH token price mean high value.
The only correct way that ALWAYS presents the real value is the "market cap".
You NEED to know this before we can continue.
Neither does a HIGH token price mean high value.
The only correct way that ALWAYS presents the real value is the "market cap".
You NEED to know this before we can continue.
3) The market cap is basically the value of ALL the tokens combined currently available in the market.
⏩ Circulating supply
If the token price is 0.10$ and there is a total of 100 million tokens available the market cap is 10 million dollars.
⏩ 0.10 x 100 million = 10m $
⏩ Circulating supply
If the token price is 0.10$ and there is a total of 100 million tokens available the market cap is 10 million dollars.
⏩ 0.10 x 100 million = 10m $
4) Want a simpler explanation?
Let's say a business company has a total worth of 10 000 dollars.
They decide to issue a total of 100 stocks.
Based on the total value of the company each stock would have a value of 100$.
⏩ 100$ x 100 stocks = 10k
Let's say a business company has a total worth of 10 000 dollars.
They decide to issue a total of 100 stocks.
Based on the total value of the company each stock would have a value of 100$.
⏩ 100$ x 100 stocks = 10k
5) What if the company decided to issue 1000 stocks?
Based on the total value of the company each stock would have a value of 10$.
10$ for each stocks is a lot more attractive than 100$ right?... Right?
The company's value is still the same. Only the total value counts.
Based on the total value of the company each stock would have a value of 10$.
10$ for each stocks is a lot more attractive than 100$ right?... Right?
The company's value is still the same. Only the total value counts.
6) Whether the price of the stock is 10$ or 100$ the total value of 10 000$ would still need to double to 20 000$.
For BOTH the price of 1 stock to reach either 20$ or 200$.
It's the same with cryptocurrencies.
A company individually decides how MANY tokens they want to mint.
For BOTH the price of 1 stock to reach either 20$ or 200$.
It's the same with cryptocurrencies.
A company individually decides how MANY tokens they want to mint.
7) So if you see a token being priced at 0.0005$ don't assume it's cheap.
It could be way more expensive than another cryptocurrencies with a token price of 500$.
⏩ Market cap is KING.
You now have a full understanding of REAL valuation.
Lets continue to presale valuation 👇
It could be way more expensive than another cryptocurrencies with a token price of 500$.
⏩ Market cap is KING.
You now have a full understanding of REAL valuation.
Lets continue to presale valuation 👇
8) Like normal projects, presales can also be HEAVILY valuated to highly to the point you have a guaranteed price drop after the launch.
As investors we invest on valuation as that's how we make money in these markets.
As investors we invest on valuation as that's how we make money in these markets.
9) If we look at the valuation of a cryptocurrency that's already trading on the market why should presales be any different?
Most would naturally expect a presale to be cheap since you are getting it BEFORE the launch on exchanges.
This is FAR from the case.
Most would naturally expect a presale to be cheap since you are getting it BEFORE the launch on exchanges.
This is FAR from the case.
10) Any company can valuate their presale on any market cap they want and new investors would never know.
Especially if they see a low token price...
The calculation is simple:
• Token price
• Total supply
⏩ Market cap
Especially if they see a low token price...
The calculation is simple:
• Token price
• Total supply
⏩ Market cap
11) You can find these things either on the website OR the whitepaper.
This is an example of a presale I invested in last year.
Based on the public pre sale price of each token at 0.06$ and a total supply of 100m the fully diluted market cap was 6M.
⏩ 0.06 x 100m = 6m mc
This is an example of a presale I invested in last year.
Based on the public pre sale price of each token at 0.06$ and a total supply of 100m the fully diluted market cap was 6M.
⏩ 0.06 x 100m = 6m mc
12) A very reasonable valuation in a bull market.
This valuation is actually based on the fully diluted value and in a presale is quite often the CORRECT and better calculation.
This valuation is actually based on the fully diluted value and in a presale is quite often the CORRECT and better calculation.
13) For those that don't know the difference.
We have 2 sorts of market cap valuations:
⏩ Circulating market cap
This is the valuation based on the AVAILABLE tokens in the market right now.
⏩ Fully diluted market cap
This is the valuation based on ALL tokens in existence.
We have 2 sorts of market cap valuations:
⏩ Circulating market cap
This is the valuation based on the AVAILABLE tokens in the market right now.
⏩ Fully diluted market cap
This is the valuation based on ALL tokens in existence.
14) At some point in time the circulating market cap which we often refer as just "market cap" will end up as the fully diluted one once ALL token unlocks are finished.
⏩ Circulating supply becomes total supply.
Fully diluted market cap is no meme however and SUPER important.
⏩ Circulating supply becomes total supply.
Fully diluted market cap is no meme however and SUPER important.
15) Especially because in a presale your tokens are ALSO vested for a certain amount.
Even the public presale we retail participate in is quite often also vested.
⏩ Vested means you get x amount of tokens each period.
10% each month for example.
Even the public presale we retail participate in is quite often also vested.
⏩ Vested means you get x amount of tokens each period.
10% each month for example.
16) The market cap showing up at the day of launch will always be way lower than the fully diluted one.
You however purchased more towards the fully diluted value because your tokens are also released at multiple token unlocks.
⏩ Hence this is the REAL calculation.
You however purchased more towards the fully diluted value because your tokens are also released at multiple token unlocks.
⏩ Hence this is the REAL calculation.
17) Things are different if you bought all your tokens on an exchange.
There's 100% access to all of your tokens after all although you still need to take into account the circulating / total supply ratio as investor.
You don't want a huge token unlock coming to your investment
There's 100% access to all of your tokens after all although you still need to take into account the circulating / total supply ratio as investor.
You don't want a huge token unlock coming to your investment
18) Here we have an example where a presale is asking for 0.12$ a token.
The total supply is 8 BILLION.
Based on this valuation they are asking 960m market cap in a BEAR MARKET.
New investors would see a low price of 0.12$ and never know.
⏩ this is a LIVE ongoing example.
The total supply is 8 BILLION.
Based on this valuation they are asking 960m market cap in a BEAR MARKET.
New investors would see a low price of 0.12$ and never know.
⏩ this is a LIVE ongoing example.
19) This is a pure ripoff and will instantly dump to unimaginable lows.
Remember that a presale valuation NEEDS to be low.
It's not even trading on the market yet so for any multiplier or profit on your investment to occur on release, it needs to be at a correct valuation.
Remember that a presale valuation NEEDS to be low.
It's not even trading on the market yet so for any multiplier or profit on your investment to occur on release, it needs to be at a correct valuation.
20) To summarize :
1) Look up token price
2) Look up total supply
3) Multiply these 2
4) Market cap revealed
Lack of experience and don't know what normal presale valuations are?
⏩ Anywhere between 1-30 million $ is acceptable.
1) Look up token price
2) Look up total supply
3) Multiply these 2
4) Market cap revealed
Lack of experience and don't know what normal presale valuations are?
⏩ Anywhere between 1-30 million $ is acceptable.
21) The difference depends on the amount of VCs and partners investing into them.
A partner like "Binance labs" would usually make for a higher presale valuation BUT they also add marketing and credibility.
It will pump higher on release so it compensates.
A partner like "Binance labs" would usually make for a higher presale valuation BUT they also add marketing and credibility.
It will pump higher on release so it compensates.
22) Nothing compensates a 100 million dollar valuation however no matter the partners UNLESS it would be the most hyped presale in the entire market.
Only a facebook or Twitter crypto launch would compensate that amount and still turn into a profit.
Only a facebook or Twitter crypto launch would compensate that amount and still turn into a profit.
23) Always calculate the right valuation from any project you invest in ESPECIALLY in a bear market where even "normal size" valuations turn into high ones.
Only the really low ones make it worth it.
Still want to get into the project?
⏩ Buy it after the dump on the markets.
Only the really low ones make it worth it.
Still want to get into the project?
⏩ Buy it after the dump on the markets.
24) Sometimes you might really like the project but don't like the valuation they ask.
In that case the markets will usually bless you with better prices later on.
Especially if what they ask is unreasonable.
In that case the markets will usually bless you with better prices later on.
Especially if what they ask is unreasonable.
25) I could have probably cut this thread short to 5 tweets but I always have the tendency to completely explain every single little detail.
Probably the high school teacher in me (previous profession).
Sorry for that. Much love for those that stuck to the end.
Nova out ❤️
Probably the high school teacher in me (previous profession).
Sorry for that. Much love for those that stuck to the end.
Nova out ❤️
26) If you want to keep up to date to most of my content give me a follow @CryptoGirlNova.
Would love the support if you could like and retweet the first tweet. Thank you 🙏❤️
First tweet 👇
Would love the support if you could like and retweet the first tweet. Thank you 🙏❤️
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