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.cryptocurrencyThe news attracted the attention of investors and quickly spread among some communities.cryptocurrencyRecently, topics such as "Ethereum ETF", "high FDV dilemma", "high market value and low circulation" and "VC projects" have attracted great attention and discussion from investors. As of press time, the attention to this incident is still growing.

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 认为近期以太币价格的飙升引证了这个预期，并补充说历史上每一次SEC对加密资产的决定都对cryptocurrency的长期价格产生了重大影响。

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

毫无疑问，ETF势必引导增量用户和增量资金入场，而“高FDV困局”则最终导致存量削减，一增一减，长远看不利于加密货币行业常态化、规模化、可持续的发展趋势。要解决高FDV困局，我们需要了解VC专案为何倾向于“低流通，高估值”的设定：因为既定的市场需求量之下，由于短期内市场流动性的稀缺，专案Token较低的流通量更有利于代币价格的设定。这里不得不谈三个角色：交换、新用户以及VC。我们知道，专业化的交易者/投资者自有一套完善的投资理念，在该议题中自然排除在外。而VC对专案代币“低流通、高FDV”的设定，主要是为了在代币上线之初有较高的定价权以便更好地实现推高FDV的目标。所以，真正能够解决新用户“高FDV困境”的关键角色，只能是exchange.

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

Founded in December 2017, CoinEx has always adhered to the brand concept of "user first" and provided currency-to-currency trading, perpetualcontract, leveraged trading, pledged lending and strategy trading and other products and services. With its user-driven market orientation, rich and diverse product functions and continuous improvement of product services, CoinEx has become an exchange that supports 1,000+ currencies, 1,500+ trading pairs, and serves more than 5 million users in more than 200 countries and regions around the world, providing them with simple, intuitive, professional and stable crypto asset trading services, escorting their crypto journey.

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