How to determine the price of a coin

In other to determine the price of a coin/token, you have to understand or know the meaning of some certain words, or let me say Crypto terms.

1. VOLUME (V) : this is the total amount of money put or invested into a particular token/coin in a day, that is 24hours. Volume can also be the amount of a coin that has been traded in the last 24hours.

2. MARKET CAPITALIZATION (MC) : This is the total amount of money put or invested into a particular coin/token since its creation or origin. It can also be regarded as the market shares of the token/coin.

3. MAXIMUM /TOTAL SUPPLY (TS) : This is the total amount of Crypto currency that will ever be produce. Example, only 21million bitcoin will be produce, not 21.1million but 21million.

4. CIRCULATIVE SUPPLY (CS) : This is the total amount of Crypto currency or total amount of coin/token present in the market. Thus has been in circulation perhaps to the investors etc.

Note: if the price of and circulative supply of coin/token goes up same time and with the same proportion, the price remains stable. Example tether.

If circulative supply of a coin/token remains constant and the volume increases, price will increase.

If circulative supply of a coin remains and the volume decreases or market capitalization decreases, the price will decrease.

PRICE (P) : price is gotten by dividing the market capitalization by the circulative supply. Please don’t get yourself confused here I will explain it mathematically in a Jiffy.

REMEMBER

Maximum supply /total supply =ts

Volume =v

Market capitalization. =mc

Circulative supply. =cs

Price. =p

Mathematically,

P= mc : cs

Or

P=mc/cs

However, from the above mathematical expression, you can see that market capitalization and circulative supply are the key words there.

That does not mean that volume should be neglected. They are all important.

Hence this explanation works for all, including altcoins (alternating coins).