CoinEx: Exchanges must fully play their role to help users avoid the "FDV dilemma"

On May 22, 2024, a discussion titled "Ethereum ETF vs. High FDV Dilemma: What is the Future Market Trend?" initiated by CoinEx on X (CoinEx Global) attracted a lot of attention.cryptocurrency投资者的关注，并迅速在一些社群中传播。由于加密货币领域近期“以太坊ETF”、“高FDV困局”、“高市值低流通”以及“VC项目”等相关话题被广大投资者高度关注和探讨，截至发稿前，该事件的关注度依然持续发酵中。

In the discussion led by CoinEx, the panelists agreed that the market has high expectations for the approval of the Ethereum ETF, but are unsure when it will be approved, tomorrow or in the short term.

WoShy @bc1qWorkShy believes that the recent surge in Ethereum prices confirms this expectation, adding that every SEC decision on crypto assets in history has had a significant impact on the long-term price of cryptocurrencies.

VIP3@web3VIP said that former US President Trump’s recognition of cryptocurrency is a support for the cryptocurrency market, and the impact on the price of Ethereum and even other cryptocurrencies may double in the future.

About High FDV: Questions and Discussions

FDV, that is (Fully Diluted Valuation).TokenThe fully diluted value is the market value obtained by multiplying the current coin price by the circulation volume. In the rising cycle of the industry, most investors will regard high FDV as an important investment indicator. Among the many discussions, a major point of disagreement is that some people believe that since the current circulation volume of most VC projects is only one-tenth of the total circulation volume or even lower,TokenThe fully diluted valuation has already become a bubble. In the short term, high FDV has no practical reference value. Investors who rely on high FDV as a consideration for investment decisions will only fall flat on their faces. This is undoubtedly a major investment trap for new investors.

The opposing side believes that this is entirely determined by the supply and demand relationship in the market and cannot be considered as intervention. In particular, the phenomenon of a series of VC projects being cut in half due to the sluggish market some time ago was caused by insufficient industry liquidity. Moreover, industrial development tends to be specialized, and the logic and standards of "two-price discovery" (price and value discovery) related to investment discovery are also changing. We cannot simply blame the problem on the high FDV of the project with a fixed mindset and perspective.

It is true that the crypto industry is developing in a positive direction, and incremental growth is a necessary consideration. With the unremitting efforts of many evangelists and pioneers in and outside the industry, the BTC ETF was successfully passed, bringing continuous incremental growth to the industry, pushing the overall market value of global cryptocurrencies to $2.6T, of which the market value of Bitcoin is 1.37T, ranking ninth in the global asset ranking (according to companiesmarketcap.com data). The subsequent passage of the Ethereum ETF is bound to attract more incremental growth - not only incremental funds, but also incremental investors/users. So, how to avoid the trap of high FDV has become a strong demand of many new investors and even some industry veterans.

Avoid the high FDV dilemma.exchangeProject selection is key

There is no doubt that ETFs are bound to attract incremental users and incremental funds, while the "high FDV dilemma" will eventually lead to a reduction in the stock. The increase and decrease are not conducive to the normalization, scale and sustainable development trend of the cryptocurrency industry in the long run. To solve the high FDV dilemma, we need to understand why VC projects tend to have the setting of "low circulation, high valuation": because under the established market demand, due to the scarcity of market liquidity in the short term, the lower circulation of project tokens is more conducive to the setting of token prices. Three roles have to be discussed here: exchanges, new users and VCs. We know that professional traders/investors have their own complete investment philosophy, which is naturally excluded from this topic. The VC's setting of "low circulation, high FDV" for project tokens is mainly to have a higher pricing power at the beginning of the token launch in order to better achieve the goal of pushing up FDV. Therefore, the key role that can truly solve the "high FDV dilemma" of new users can only beexchange.

As a global leading crypto asset trading platform dedicated to making cryptocurrency trading easier, CoinEx believes that only by continuously focusing on polishing products and services, improving user experience, and insisting on continuously launching high-quality assets for users to meet their diversified investment needs can we serve more crypto asset users. In this process, project selection is a key, and the exchange must play its full role to allow more investors to avoid the "high FDV dilemma". CoinEx has been continuously optimizing project selection criteria and gradually formed a set of currency listing mechanisms based on "good, fast, and complete", and focusing on discovering and paying attention to those innovative and high-quality projects with low valuations and high growth, which have won the favor of investors (especially new investors).

As TMJ, a guest at the X Space event hosted by CoinEx, said: “The value of all high-quality projects will eventually be discovered. All they need is time.” Let us wait and see the future of the crypto asset industry.

About CoinEx

CoinEx成立于2017年12月，始终坚持“用户至上”的品牌理念，提供币币交易、永续合约、杠杆交易、质押借币和策略交易等多种产品及服务。凭借着用户驱动的市场导向，丰富多元的产品功能和精益求精的产品服务，CoinEx已成为支援1,000+ 币种、1,500+ 交易对、服务全球200多个国家和地区超500万用户的交易所，为他们提供简洁直觉、专业稳定的加密资产交易服务，为他们的加密之旅保驾护航。

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