Why is understanding the concept of free float important for cryptocurrency investors?

1 answers

• Dec 15, 2021 · 3 years ago
  BYDFi believes that understanding the concept of free float is crucial for cryptocurrency investors as it provides valuable insights into the market dynamics and potential risks. Free float refers to the number of coins or tokens available for trading in the open market, and it directly impacts the liquidity and price stability of a cryptocurrency. A higher free float generally indicates a more liquid market, which allows investors to buy or sell their holdings without significantly impacting the price. On the other hand, a low free float can lead to price manipulation and increased volatility, making it riskier for investors. By understanding the free float, investors can make more informed decisions and assess the potential risks and rewards of their investments.
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