How does the concept of free float apply to the trading of digital currencies?

1 answers

• premkumar GNov 15, 2024 · a year ago
  In the context of digital currencies, the concept of free float refers to the number of coins or tokens that are available for trading on the market. It excludes coins that are held by the project team, locked in wallets, or not actively traded. The free float can impact the liquidity and price stability of digital currencies. When the free float is high, it means there is a large supply available for trading, which can increase liquidity and potentially reduce price volatility. Conversely, a low free float can result in limited liquidity and higher price volatility. Traders and investors often consider the free float when assessing the market conditions and making trading decisions. It provides insights into the potential supply and demand dynamics of digital currencies.
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