Institutional-Grade Analysis, In-depth Insights, Animoca Brands Research

Animoca Brands Research

Animoca Research provides institutional-grade analysis, in-depth insights, and unbiased information to all participants in the digital asset industry

Institutional-Grade Analysis, In-depth Insights

Animoca Brands Corporation Ltd. is a Hong Kong-based game software company and venture capital company

Crypto

<ul><li aria-level="1">Fully Diluted Valuation (FDV) and Market Capitalisation (MC), while subject to various externalities, are often used as reference points for token valuation. However, this approach is ambiguous for early-stage tokens: Small circulating floats and speculative momentum often inflate FDV, creating uncertainty over whether to benchmark against peers’ FDV or to adjust for differences in circulating supply.</li><li aria-level="1">We analysed over 800 tokens, regressing circulating supply (%CS) against both Fully Diluted Valuation (FDV) and Market Capitalisation (MC), with results segmented by project maturity and time.</li><li aria-level="1">Main finding: Throughout most of a token’s life, MC explains valuation behaviour more reliably than FDV. The market anchors on circulating supply rather than total theoretical value.</li></ul>

Fully Diluted Valuation (FDV) and Market Capitalisation (MC), while subject to various externalities, are often used as reference points for token valuation. However, this approach is ambiguous for early-stage tokens: Small circulating floats and speculative momentum often inflate FDV, creating uncertainty over whether to benchmark against peers’ FDV or to adjust for differences in circulating supply.We analysed over 800 tokens, regressing circulating supply (%CS) against both Fully Diluted Valuation (FDV) and Market Capitalisation (MC), with results segmented by project maturity and time.Main finding: Throughout most of a token’s life, MC explains valuation behaviour more reliably than FDV. The market anchors on circulating supply rather than total theoretical value.

Interpreting Circulating Supply Effects on Token Valuation: MC Vs FDV

Bitcoin

Interpreting Circulating Supply Effects on Token Valuation: MC Vs FDV