•Important Read• Market Valuation and Sub Penny Coins

One thing I have been observing consistently, from investors on YT, FB, here on Steemit, and real life conversations, is a misconception of having 1,000 coins at $1 will give you a greater chance of better ROI for the future than 10 coins at $100.

This is wrong, and you have to take this into consideration. I’ll give you an example. In this example we’ll assume a static circulating supply because we are keeping this basic and simple.

Coin Price(CP) x Circulating Supply(CS)= Market Cap(MC)

Coin 1 “Sub penny” priced coin:
0.00005(CP) x 10,000,000,000(CS) = 500,000(MC)

Coin 2 "High" priced coin:
500(CP) x 1000(CS) = 500,000(MC)

In these two examples, market cap is identical. While ‘Coin 1’ has 10 Billion circulating supply and ‘Coin 2’ has only 1000 CS.

If the company or project gets traction and the valuation (MC) rises by 2x this is what happens:

Coin 1 "Sub penny" priced coin:
0.00010(CP) x 10,000,000,000(CS) = 1,000,000(MC)

Coin 2 "High priced coin:
1000(CP) x 1000(CS) = 1,000,000(MC)

The market cap doubles for each. The price of the coin doubles for each. Myself being a Real Estate Investor: If I have 10 houses at $100,000 each or 1 at $1,000,000, the total value of each are the same. If after one year they gain 15%, the value of your total assets will be $1,150,000 in both cases.

Your gains are proportionally tied to the valuation of the company at the moment of your investment.. It makes no difference if you bought 1 million coins at .00005 cents or 100 coins at $100. It makes absolutely no difference to ROI.

(Note that coins like EOS that have ongoing funding are different to evaluate, and most coins are actively being mined, or actively releasing new coins into the market. These factors play a role in valuation as well, but the core, fundamental principles of market valuation still remain.)

I don't claim to be an expert. Please DYOR and come back to me with any corrections you may have or believe to be true. The purpose of this is to help everyone succeed in this space. To understand what, how and why they chose to invest, and to optimize their investment potential.

Peace & Love

@greenroom. 1