How to Tell if a Crypto Token Is Worth Its Trading Price

Jose Macedo of Delphi Digital and Ari Paul of BlockTower Capital explain why a cryptocurrency can have very different prices in the public and private markets and how they try to understand its real value.

Published on July 2, 2024 at 12:00 PM EST.

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The problem of low-float, high fully diluted valuation (FDV) coins is one that is often discussed in the cryptocurrency world. But there is another problem: investors need to understand the unrealized gains of these coins to truly understand their price.

In this episode, Delphi Digital’s Jose Macedo and Blocktower Capital’s Ari Paul explain the various metrics that reveal the true value of a coin, why a wave of token unlocks hitting cryptocurrency markets in the coming years isn’t bullish, and whether there’s a better way to design token unlocks for teams and insiders.

They also explore whether venture capitalists are extractive towards cryptocurrencies, whether these circulating supply and FDV games have pushed investors towards memecoins, and why they believe the ICO era has been better for retail investors.

Show highlights:

• Why Upcoming Token Unlocks Are Causing Market Nervousness
• How the ratio of unrealized earnings to market cap affects token price movements
• How Some Token Projects Manipulate Their Reported Circulating Supply
• If and how everyday investors can find out the truth about token projects
• What Secondary Market Trading Says About the Potential Impact of Upcoming Token Unlocks
• Why Jose believes that the current token launch strategy, despite its flaws, is still preferred by insiders and unlikely to change anytime soon
• Why some projects favor decisions that are more likely to produce short-term gains than long-term success
• Why Jose believes simple time-based token unlocks often work better than complex metrics, and how projects can balance funding with realistic success metrics
• Why Ari believes the SEC’s investigations into VCs acting as securities dealers may be warranted, and how these practices resemble pump-and-dump schemes
• With the upcoming unlocking of numerous tokens, why the outlook is bearish for many projects and what challenges they face to mitigate potential sell-offs
• Why Many Crypto Investors May End Up Holding On to the Stock in the Current Cycle, Despite Plans to Sell Early and Avoid Losses
• What will be the future role of VCs in the cryptocurrency industry and how the influx of token unlocks and the rise of memecoins could shape the bull cycle

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Guests:

• Jose MacedoFounder of Delphi Labs
• Ari PaulCIO of Blocktower Capital
  • Previous appearances in Unchained:

Connections

High FDV and unlocks:

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