Large or Low supply Token, the metric matter.

about 3 years ago

I have been in the crypto space for a couple of years and I have invested in several crypto assets. We all know that the demand/supply drives cryptos. The higher the demand, the higher the price will go in the market and the lower the demand, the lower the price continues to drop. However, many people believe that low supply tokens are better than large supplies. It is a general thing in the crypto space. Bitcoin max supply is 21 million and the use-cases and solutions are massive, that is why we have the $66,000 ATM. However, there are many promising projects out there with a lower cap, good team, good plan, but are not doing well.

Stock-to-Flow is one of the good measures to know a good cryptocurrency project. This is basically the amount of asset held in reserve divided by the amount produced yearly. It is the same ratio that worked on Bitcoin.

I remember when TLM launched in the Binance exchange. I knew the TLM price will drop drastically from $6 before it happened. The coin has been on other exchanges for a while and they announced they are going on Binance exchange. Plus, they allow easy mining of the token on the Alien world website to the point that they do not use a basic bot filter. People mined thousands of the coins for free and dump for them. The token still struggles below $1 till today.

There are algorithms that are not just going to work, no matter the number of users or investors in the community. There are projects that will come out looking so promising with go token metrics/algorithm but they will still fail. Recently, I invested in a new project on the Binance chain. It is a DEFI project with a kind of new smart algorithm. The supply of the coin is just 73,000. I saw the token at $60. I got a few tokens because of the use. I staked it to mine more of the coin. There are several coins there to be mined, including Ethereum. After a while, the token started losing value. Right now it is below $10. The project has some potential truly, but it is because some set of people are pulling down the price. However, I do not believe that with these uses and little supply the coin should lose this much value.

So, I think it doesn’t really matter the amount of coin in circulation for a project. What really matters is the uses, mining metrics, size of the community and the influencers for the project. These can make a large supply project do well even than the so-called low cap gem.

It is about investing right!

My name is @tykee (Barlogun Michael), a web developer, Civil engineer, content writer and the founder of Meshboc Technology & Digital Services Limited. I am using my content to share my opinions on tech, lifestyle, and finance, to promote myself and impact my readers. I always like to learn. Education is the most thing I cherish.

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