1) The MOST common mistake made in the crypto industry by newcomers is looking at the price of a token as valuation model.
A thread on why market cap is king and buying that 0.0005$ token could be your most EXPENSIVE mistake.
๐งต๐
A thread on why market cap is king and buying that 0.0005$ token could be your most EXPENSIVE mistake.
๐งต๐
2) There's a reason why most tokens with no utility have an insane amount of supply and a very low token price.
Newcomers fall for the trap of thinking a low token price corresponds to a low valuation.
Individuals with bad intentions know this and happily take advantage of it.
Newcomers fall for the trap of thinking a low token price corresponds to a low valuation.
Individuals with bad intentions know this and happily take advantage of it.
3) The moment a cryptocurrency is created any developer can choose how much supply of tokens they want to mint.
It's exactly this number that will be responsible for the price of one single token.
We'll cover the exact details with some live examples down below.
It's exactly this number that will be responsible for the price of one single token.
We'll cover the exact details with some live examples down below.
4) The REAL value of a cryptocurrency project is the sumn of all tokens currently available on the markets.
โฉ This is called the market cap.
If crypto X is trading at 2$ and there are 10 million tokens in circulation the market cap is 20 million dollars.
โฉ This is called the market cap.
If crypto X is trading at 2$ and there are 10 million tokens in circulation the market cap is 20 million dollars.
5) This also means that IF there where 100 million tokens in circulation crypto X would be trading at 0.2$.
All while still maintaining the same 20 million dollar market cap.
Remember when I said a developer can CHOOSE how many tokens they create.
All while still maintaining the same 20 million dollar market cap.
Remember when I said a developer can CHOOSE how many tokens they create.
6) Overall the project would still need to see a 20 million dollar market cap increase to see the same 2$ token or 0.2$ token double in value.
All while newcomers would think it takes a lot less investment capital to take a 0.2$ token to 0.4$ than take a 2$ token to 4$.
All while newcomers would think it takes a lot less investment capital to take a 0.2$ token to 0.4$ than take a 2$ token to 4$.
7) Market cap is king and represents the current true value of a cryptocurrency.
โฉ $XRP has a 0.35$ token price.
It's market cap is 17.7 billion dollars.
โฉ $QNT has a 106$ token price.
It's market cap is 1.5 billion dollars.
โฉ $XRP has a 0.35$ token price.
It's market cap is 17.7 billion dollars.
โฉ $QNT has a 106$ token price.
It's market cap is 1.5 billion dollars.
8) To move $XRP from 0.35$ to 0.70$ it would need a market cap increase from 17.7 billion dollars.
This would be necessary to double your investment amount if you bought #XRP.
To move $QNT from 106$ to 212$ it would need a market cap increase from 1.5 billion dollars.
This would be necessary to double your investment amount if you bought #XRP.
To move $QNT from 106$ to 212$ it would need a market cap increase from 1.5 billion dollars.
10) This is NO debate which project is the superior one.
Neither is this a debate whether a high or low supply is better or worse.
It depends on the vision and utility of the token that a developer usually chooses a certain amount of supply over the other.
Neither is this a debate whether a high or low supply is better or worse.
It depends on the vision and utility of the token that a developer usually chooses a certain amount of supply over the other.
11) This is a simply an explanation why the token price is irrelevant as a valuation model.
After this thread you might just be avoiding your most expensive mistake and buying an overpriced project with a 0.0001$ token price.
Nova out โค๏ธ
After this thread you might just be avoiding your most expensive mistake and buying an overpriced project with a 0.0001$ token price.
Nova out โค๏ธ
12) 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 ๐โค๏ธ
First tweet ๐
Would love the support if you could like and retweet the first tweet. Thank you ๐โค๏ธ
First tweet ๐
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