Fully Diluted Valuation (FDV) is a key metric in the cryptocurrency space, estimating a project's value assuming all tokens are in circulation.
Why FDV Matters
FDV helps investors gauge the long-term potential of a cryptocurrency. Unlike market capitalization, which only reflects circulating tokens, FDV considers the total supply, making it an essential tool for evaluating scalability and growth potential.
Differences Between FDV and Market Cap
Market cap focuses on the current supply of tokens, while FDV looks at the full potential supply. For example, the SUI token demonstrates how current market cap differs from FDV, highlighting potential risks and growth opportunities.
How Token Supply Affects FDV
Changes in token supply directly impact FDV. Increased token circulation raises FDV, potentially diluting existing token values. Monitoring tokenomics is crucial, as it affects both FDV and market cap.
Ignoring FDV can lead to mistakes in assessment. Understanding this metric provides a clearer picture of a crypto project's growth potential and highlights key success factors.
