Reading Market Metrics

It is important to understand each of the statistics when considering investing in a particular cryptocurrency. Below are some definitions that may be helpful when evaluating potential cryptocurrency investments.

Price:

This is the price for one (1) single token of the cryptocurrency. Multiplying the price by the token balance will determine the current value of the balance of tokens.

Total Supply:

This is the total number of tokens that currently exist for this asset. Some cryptocurrencies have a static supply, but others may have an inflation schedule for distributing new tokens to the ecosystem.

Market Cap:

The market cap is a calculation of the value for the entire supply of the specific cryptocurrency. This is calculated by multiplying the current token price by the current number of tokens in circulation. 

FDV - Fully Diluted Evaluation:

The fully diluted evaluation (FDV) is similar to the market cap, but also includes the total number of tokens that exist. For some cryptocurrencies, only a portion of the supply is currently tradable, so the FDV is the calculation of what the market cap would be if all the current tokens were in circulation.

Liquidity:

The liquidity for an asset is the amount of funds available in a liquidity pool for swapping. A low amount of liquidity means that there are less tradable funds in the pool to redeem when selling (or purchasing) the cryptocurrency and can lead to increase slippage - resulting in a poor exchange rate.

Volume:

Typically measured over a 24-hour period, the volume indicates the total amount of funds that have been transacted with this cryptocurrency (buying or selling) and can be a strong indicator of the interest in the asset.