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How does fully diluted market cap affect the valuation of a digital currency?

avatarAlaa SayedDec 26, 2021 · 3 years ago1 answers

Can you explain how the fully diluted market cap of a digital currency impacts its valuation? What factors are involved in calculating the fully diluted market cap and how does it affect the overall value of a cryptocurrency?

How does fully diluted market cap affect the valuation of a digital currency?

1 answers

  • avatarDec 26, 2021 · 3 years ago
    The fully diluted market cap is a metric that considers the maximum potential value of a digital currency by including all the tokens that could be in circulation. It takes into account not only the currently circulating supply but also the tokens that are locked or held by the team and investors. The fully diluted market cap can provide insights into the overall value of a cryptocurrency, but it's important to note that it may not accurately represent the actual market value. Other factors such as market demand, adoption, and competition also impact the valuation of a digital currency. Investors should consider multiple factors and conduct thorough research before making any investment decisions based on the fully diluted market cap.