Nube question

113 viewsCommunity Technical Support

Nube question

Can somebody explain to me in simple terms why ETH can go from 50 cents to 2000 dollars whereas polygon or cardano cannot do that? What would need to happen for that to happen? Thanks

Danusushka de zoyza Answered question September 12, 2024
0

The price of a cryptocurrency is determined by dividing its market cap by the total supply of tokens.

When a token has a high supply, it requires a larger market cap to increase the value of each token.

For example, if there is only one token and the market cap is $100, the value of that single token would be $100. However, if there are 100 tokens with the same market cap of $100, the value of each token would be $1.

So if you’re investing in a token like ADA that has a large token supply, it requires an enormous amount of money (market cap) to get to $1000 which is trillions of dollars to reach that evaluation.

Danusushka de zoyza Answered question September 12, 2024
0