Key insights

• ⚡ Bitcoin's rally and altcoins' lag is linked to overlooked tokenomics like fully diluted valuation (FDV) and circulating supply
• 💰 High FDV and low float can impact short-term and long-term investments by affecting future supply hitting the market and prices
• 🐛 Example of Wormhole's W token with high FDV and concerns about the future supply impact
• 🌍 Worldcoin's low float and high FDV present a significant challenge for potential growth, with daily inflation of 4% expected from 2024
• 🔄 Controversy over high FDV and low float in the crypto market, contrasting perspectives, and similarity to practices in previous cycles
• 📉 Cryptocurrency market on Binance experiencing drops, not solely due to VC dumping, but influenced by unsustainable valuations and VC-reliant model
• 🌱 Investing in tokens at pre-launch or seed rounds can yield higher returns, impacted by token locks, OTC trading, and artificial scarcity through low floats
• ⚙️ Understanding tokenomics, extreme valuations, and minuscule floats crucial for crypto investment decisions

Q&A

• Why is understanding tokenomics crucial for crypto investment decisions?

  Understanding tokenomics is crucial for crypto investment decisions because projects with extreme valuations and minuscule floats may struggle to gain traction. It's important to research token unlocks and vesting schedules before making investment decisions.

• How do pre-launch or seed round investments in tokens differ from post-launch public market purchases?

  Investing in tokens at pre-launch or seed rounds often leads to significantly higher returns compared to post-launch public market purchases. However, token locks, OTC trading, and the creation of artificial scarcity through low floats pose challenges for retail investors.

• Why is the cryptocurrency market on Binance experiencing price drops, and what influences it?

  The cryptocurrency market on Binance is experiencing price drops not solely due to VC dumping, but also because of unsustainable valuations, the VC-reliant model, geopolitical tensions, and the projected unlocking of $155 billion worth of tokens by 2030 without matching demand.

• What is the discussion around the controversy over high FDV and low float in the crypto market?

  There is an ongoing debate over the significance of high FDV and low float in the crypto market, with contrasting perspectives. Data suggests that this model isn't new and has been in practice for a while, even in previous cycles of top crypto projects.

• How does Worldcoin's low float and high FDV pose challenges for potential growth?

  Worldcoin has an extremely low float with just 2.27% of its total supply currently in circulation. With a staggering FDV of $60 billion and anticipated daily inflation of 4% from 2024, investing in this token presents significant risks and challenges for potential growth.

• Can you provide an example of a cryptocurrency with high FDV and concerns about future supply impact?

  Wormhole's W token is an example of a cryptocurrency with a high FDV and only 18% of its tokens currently on the market, raising concerns about the potential impact of future supply hitting the market and affecting prices.

• What is fully diluted valuation (FDV) and how does it impact crypto investments?

  Fully diluted valuation (FDV) is the price of a cryptocurrency multiplied by the maximum supply of tokens. It impacts crypto investments by indicating potential future supply hitting the market, thereby affecting prices and both short-term and long-term investment outcomes.

• 00:00 Bitcoin is rallying while altcoins are lagging due to overlooked tokenomics, specifically fully diluted valuation (FDV) and circulating supply. FDV is the price multiplied by the maximum supply, which can impact short-term and long-term investments. Cryptos with high FDV and low float may lead to future supply hitting the market, affecting prices. For example, Wormhole's W token has a high FDV with only 18% of tokens currently on the market, raising concerns about future supply impact.
• 03:33 Worldcoin's extremely low float and high fully diluted valuation (FDV) present a significant challenge for potential growth, with only 2.27% of the total supply currently in circulation. The FDV stands at a staggering $60 billion, and with daily inflation of 4% expected from 2024 onwards, investing in this token comes with significant risks.
• 07:44 The controversy over high FDV and low float in the crypto market is being debated, with contrasting perspectives on the significance of these figures. Data suggests that this model isn't new and may not be specific to crypto. Some top crypto projects from previous cycles followed a similar model, indicating it's been in practice for a while.
• 11:06 The cryptocurrency market on Binance is experiencing price drops, and it's not solely due to VC dumping as their allocations are not yet unlocked. However, this may not be sustainable in the long term as more tokens will be unlocked without enough demand. The market is also influenced by unsustainable valuations and the VC-reliant model.
• 14:29 Investing in tokens at pre-launch or seed rounds often leads to significantly higher returns compared to post-launch public market purchases. Token locks and OTC trading further impact token prices and create challenges for retail investors. Projects aim to maintain high valuations by creating artificial scarcity through low floats. Successful cryptos such as soul have navigated challenges to achieve success.
• 18:16 Understanding tokenomics in the context of market conditions is crucial for crypto investment decisions. Projects with extreme valuations and minuscule floats may struggle to gain traction. It's important to research token unlocks and vesting schedules before making investment decisions.