The cryptocurrency market is a realm of high volatility and uncertainty, yet many investors continue seeking value investment opportunities.
Value investing refers to identifying assets trading below their intrinsic worth. Through fundamental analysis, we focus on two key aspects:
Valuation
Market Capitalization (Circulating Supply)
Market cap represents a token's short-term or real-time valuation based on circulating supply.
Fully Diluted Valuation (FDV)
FDV calculates a cryptocurrency's total market value if 100% of tokens were in circulation. Due to lockups, staking, or tokenomics, circulating supply often differs from total supply.
FDV remains a reliable long-term potential indicator. Comparing FDVs across similar projects helps identify over/under-valued tokens.
The circulating-to-FDV ratio reveals liquidity dynamics:
- Low-circulation tokens (e.g., LINK, AVAX with >50% locked) experience volatility during unlock events
- High-circulation tokens (100% distributed) often underperform (e.g., MATIC in current cycle)
👉 Discover undervalued gems with real-time FDV tracking
Investment Strategy
Buy undervalued tokens within comparable sectors/projects. For example:
- Choose OP over ARB when FDV indicates better valuation
- Prioritize projects with higher locked value vs. fully decentralized ones
Project Momentum
Metcalfe's Law
This principle estimates network value as the square of interconnected users. Crypto projects relying on network effects (e.g., DEXs, social platforms) benefit from growing user bases.
Meme Coin Communities
Community size indicates meme coins' cultural traction and sustainability potential.
GameFi Player Counts
Active players reflect play-to-earn ecosystems' engagement levels and revenue prospects.
DeFi/Layer2 TVL
Total Value Locked measures protocol liquidity and user trust—critical for assessing DeFi health.
Exchange Token Volumes
Trading platform activity correlates with platform token valuations.
👉 Track emerging trends across all crypto sectors
Investment Strategy
Anticipate shifting narratives:
- Recognize OKX's Web3 push vs. Binance's challenges
- Observe PEPE/ORDI challenging DOGE's meme dominance
- Adapt positions to market evolution rather than holding static beliefs
FAQ
Q: How does FDV differ from market cap?
A: Market cap uses circulating supply, while FDV calculates value if all tokens existed today.
Q: Why do high-circulation tokens often underperform?
A: Complete distribution removes future buying pressure from unlocks, slowing price appreciation.
Q: What's the best indicator for DeFi projects?
A: TVL combined with protocol revenue provides the clearest health metrics.
Q: How early should one invest in emerging trends?
A: Ideal entry occurs when metrics show traction but before mainstream recognition (e.g., rising Google searches + social mentions).
Q: Do meme coins have fundamental value?
A: Their value derives entirely from community engagement—track social growth rather than traditional metrics.
Q: How often should valuations be reassessed?
A: Re-evaluate quarterly or when major events occur (funding rounds, protocol upgrades, macroeconomic shifts).