Author: Bugsbunny Source: X, @octopusycc
How to find tokens currently at VC “cost price” from the perspective of “market value – valuation”? Let’s boldly provide a bottom-fishing reference that may be unique to the entire Twitter.
1. The significance of “market value is 1-2 times valuation”
If VC cannot bring more than 2 times profit, they would rather buy BTC directly (fun fact: BTC has rebounded by nearly 80% this year). When the token price is at 1-2 times valuation, the project party is like buying back tokens from VC. (The biggest selling pressure for altcoins is unlocking tokens) At this point, there is nothing left to sell, and market makers can inject liquidity at this time.
2. Why not look at seed round valuations?
Seed round projects may have 50 investments but only one may succeed, and they need to make money from that. Seed round valuations and unlocking dates are chaotic and unpredictable.
3. Why look at Market Cap instead of FDV?
Most blockchain projects are difficult to sustain for more than 2 years, while FDV often starts at 5 years. If calculated by FDV, the significance of this table would be very poor.
4. How to use this guide?
Green represents token prices within 1-2 times valuation; blue represents token prices within 2-3 times valuation; no color indicates token prices above three times valuation; red indicates token prices below valuation. In theory, market makers need to maintain their token prices within the range of 1-3 times valuation, as there is no more room for decline (this is not the only measure, but an important one to consider). Therefore, maintaining token prices that are strong, such as those at 2 times valuation or above (blue or no color), means market makers are of higher quality.
5. Some projects do not have valuations, how are valuations obtained?
Data sources include @CoinMarketCap, @RootDataLabs, token unlocks, thanks to the data support from these three service providers. Some projects do not have PR valuations, so we can only attempt to estimate them, and we hope for gentle feedback from everyone.
6. Note:
Pay extra attention to the highlighted parts, as these are tokens unlocking in May and June, which may bring additional selling pressure to the market.
