The Crypto Scam You’re Falling For: Low Float, High FDV Tokens Exposed!

Understanding the Pitfalls of Low Float, High FDV Tokens

The cryptocurrency market has witnessed a surge in projects launching tokens with low circulating supply (low float) and high fully diluted valuations (FDV). While these tokens may appear promising, they often harbor significant risks for unsuspecting investors.​

What Are Low Float, High FDV Tokens?

Low float refers to tokens with a small portion of their total supply in circulation, while high FDV indicates a substantial total valuation based on the token's price and total supply. For instance, a project might have an FDV of $10 billion but only $100 million worth of tokens in circulation. This setup can create an illusion of scarcity and value, potentially inflating the token's market price.

The Risks Involved

Such tokenomics can be misleading. Early investors and project insiders often hold significant portions of the total supply. As these locked tokens become available, they may flood the market, leading to price depreciation. Unchained reported in 2024 that “low float, high FDV tokens often leave little upside for traders after the token generation event.” ​

Investor Vigilance

Investors should exercise caution and conduct thorough due diligence before investing in such tokens. Understanding the token's supply schedule, the proportion held by insiders, and the project's fundamentals are crucial steps in mitigating potential losses.​