#BinanceABCs **Beginner's Must-Read: Quickly Master Core Cryptocurrency Concepts from A to Z** Getting started with Web3 feels a bit confusing? The crypto jargon is overwhelming, with $BTC $ETH $XRP taking turns—what exactly is what? Today, we’ll clarify these easily confused concepts all at once. **Basic Asset Section** Altcoin refers to all cryptocurrencies other than Bitcoin. Token is a digital asset issued on an existing blockchain, like USDT. Utility Token is a type of token with actual use within the project ecosystem. **Wallet and Trading Section** To store crypto assets, you need a Crypto Wallet—that's your digital wallet capable of storing, sending, and receiving assets. For trading, you can use Market Order for instant execution or choose Spot Trading for spot buying and selling. **On-Chain Worldview** Blockchain is a decentralized ledger where all transactions are recorded. On-chain transactions are settled directly on the blockchain. DeFi (Decentralized Finance) allows you to perform financial operations without intermediaries like banks. Gas Fee is the fee you pay for these on-chain operations—it ensures the network runs smoothly. **Market Phenomena and Risks** FOMO refers to the impulse to buy impulsively out of fear of missing out, especially during rapid price increases. HODL is the opposite, meaning holding long-term without wavering. Whale refers to investors holding large amounts of crypto assets— their actions often influence the market. Pump & Dump are price manipulation schemes, pumping up prices before crashing them down. Volatility measures the extent of price fluctuations, which is a characteristic of this market. **Technology and Verification** RSI (Relative Strength Index) helps assess market momentum. KYC is the "Know Your Customer" process used by many exchanges for identity verification. QR Code makes it easy to quickly scan wallet addresses. Zero Knowledge Proof is a privacy protection technology that verifies information without revealing data. **Exploring New Concepts** NFT (Non-Fungible Token) represents unique digital assets. ICO (Initial Coin Offering) is a fundraising method for new projects. Liquidity indicates the ease of buying and selling assets. X-Chain involves cross-chain technology, enabling interoperability between different blockchains. Yield Farming is earning rewards by providing liquidity in DeFi. **Final Advice** ▪ Learn the theory first, then think about making money. Solid understanding of these concepts gives you confidence in practical applications. ▪ Every term represents real trading logic and market phenomena. ▪ Are there any other concepts confusing you? Share in the comments, and let’s figure them out together.

## Why Should You Look at FDV When Investing in Cryptocurrency? Don't Be Confused by Market Cap Many novice investors see a coin with a relatively small market cap and think it's cheap, but this is one of the easiest traps to fall into. What you really need to look at is **Fully Diluted Valuation (FDV)**, which reveals the project's true potential and risks. ### How big is the difference between market cap and FDV? Simply put, market cap is just the tip of the iceberg. It only calculates the current circulating supply of tokens multiplied by the current price, but the project also has a large number of tokens locked, unreleased, or being gradually released. FDV considers all tokens, representing the maximum potential dilution in the future. For example: a coin has a total supply of 1 billion tokens, with 500 million tokens in circulation, priced at $0.5. - **Market Cap**: 500 million × $0.5 = $250 million - **FDV**: 1 billion × $0.5 = $500 million It looks like a twofold difference, but the actual risk could be greater—when the remaining 500 million tokens are unlocked and enter the market, the price often faces downward pressure. ### Calculating FDV is actually very simple The formula is straightforward: **FDV = Total Supply × Current Token Price** The total supply includes: - Tokens already in circulation - Locked tokens - Reserved or uncreated tokens in the future ### Let’s see how major projects compare **Bitcoin** as of the latest data: - Circulating Market Cap: $1,715.07B - FDV: $1,715.07B (since it is nearly fully circulated) - Max supply: 21 million coins, current circulation 19.96 million - Price per coin: $85,910 Bitcoin’s FDV and market cap are basically equal, indicating it has almost fully released tokens and the dilution risk in the future is small. **Ripple (XRP)** has a different situation: - Fully Diluted Market Cap: $187.27B - XRP has special escrow and gradual release mechanisms, with a large number of tokens yet to be released in the future. **NEXO** shows a clearer comparison: - Fully Diluted Market Cap: $907.80M - Circulating Market Cap: $907.80M - Circulating supply: 1 billion tokens - It appears that FDV equals market cap, but one should pay attention to its issuance plan. ### Four scenarios, different investment risks **Low market cap, high FDV**: prices may be seriously overestimated, and large token unlocks could lead to price dumps. **High market cap, low FDV**: the project has basically completed release, and future dilution risk is small. **Low market cap, low FDV**: either a new project or a distressed project; highest risk. **High market cap, high FDV**: mature project, but need to verify if FDV premium is reasonable. ### Why can't we just look at FDV? This is the key—FDV involves many assumptions: 1. **Assuming the price remains unchanged**: which is impossible in reality. Large token releases usually cause price drops. 2. **Ignoring the release schedule**: some projects release all tokens within 5 years, others could dump them within a month. 3. **Not considering market factors**: regulatory policies, market competition, technological progress all impact actual value. 4. **Easily used as a marketing tool**: project teams may deliberately design high FDV to attract investors. ### How should investors interpret this? Don’t just focus on market cap and FDV; you should also consider: - The actual progress of token release - Team’s ownership share and lock-up periods - The project’s real progress and competitiveness - Community activity level FDV is a useful reference, but it's like house appraisal—when buying a house, you don’t just look at the appraised value; you also consider location, structure, market conditions. Crypto investing is the same; multiple perspectives are needed to see the truth clearly.

## What exactly is an ETF? Why are cryptocurrencies increasingly involved in this field Exchange-Traded Funds (ETFs) are becoming a key bridge connecting traditional investments with digital assets. Recently, ETF application updates for Litecoin, Solana, and XRP have been frequent, marking an acceleration in the integration of cryptocurrencies into mainstream finance. ## How ETFs Work and Their Core Advantages **Understanding the Essence of ETFs** An ETF is a fund product listed and traded on a securities exchange, combining the diversification benefits of traditional mutual funds with the flexibility of stocks. This instrument tracks a specific underlying—whether an index, commodity, or a basket of crypto assets—and can be freely bought and sold during trading hours at real-time market prices. Its unique features include: management fees that are more competitive compared to actively managed funds, ample liquidity for quick entry and exit, and structural design that offers excellent tax efficiency. Investors can view complete holdings daily, providing transparency far beyond other fund products. **Differences Between Spot ETFs and Futures ETFs** Spot ETFs directly hold the underlying assets (such as Bitcoin spot, Ethereum spot), ensuring precise price tracking. Futures ETFs, on the other hand, gain exposure through futures contracts but must bear rollover costs, which may cause deviations from spot prices. ## Deep Driving Forces Behind Cryptocurrency Embracing ETFs **Lower Entry Barriers and Attracting Incremental Capital** Traditional investors do not need to master complex operations like wallet management or private key protection; they can participate through existing securities accounts. Regulatory restrictions faced by pension funds, insurance funds, and other institutional investors are thus alleviated, as ETFs provide a fully compliant entry route. **Confidence Shift Brought by Regulatory Endorsement** When authorities like the SEC or FDA approve a cryptocurrency ETF, it essentially signifies official recognition of the asset’s legality. This endorsement removes long-standing concerns about the "gray area" in the market, attracting conservative investors and promoting mainstream adoption of the asset. **Mechanisms to Deepen Market Liquidity** ETFs use authorized participant creation and redemption mechanisms to effectively reduce deviations between the fund’s net asset value (NAV) and market price. This design attracts more investors unfamiliar with crypto exchanges, expanding the investor base and fostering a healthier pricing environment. **Institutional-Grade Risk Management Tools** Multi-asset ETFs (such as those holding both BTC and ETH) allow investors to diversify the risks associated with sharp fluctuations of a single asset. Futures ETFs provide risk management tools like shorting and hedging, enhancing portfolio flexibility. ## Challenges and Constraints in Practice **Strict Regulatory Approval Processes** Authorities’ cautious attitudes toward market manipulation, liquidity risks, and custody security lead to lengthy approval cycles. For example, the SEC only approved a spot Bitcoin ETF in early 2024 after years of rejection, demonstrating their prudence. **Tracking Deviations at the Technical Level** Rollover costs of futures contracts directly impact ETF NAV, making it difficult to precisely replicate spot price movements. Such deviations can accumulate over long-term holdings, causing difficulties for investors seeking accurate tracking. **Inherent Volatility of Crypto Assets** The extreme volatility of virtual currencies means ETF NAVs can experience significant swings, putting pressure on investors with limited risk tolerance. **Uncertainty in Tax Policies** Tax treatment of crypto ETFs varies greatly across countries, with some nations taxing them as securities, which differs entirely from the tax treatment of direct holdings. ## Important Milestones in the Historical Process Canada’s Purpose Bitcoin ETF (launched in 2021) pioneered the first spot Bitcoin ETF globally, leading to a clear follow-up effect in North America. Although the US ProShares Bitcoin Strategy ETF was the first to introduce a futures ETF, it faced issues due to futures premium problems. By 2024, giants like BlackRock and Fidelity received approval for spot Bitcoin ETFs, marking a fundamental shift in regulatory attitudes. ## Real-Time Performance of Cryptocurrencies According to the latest market data (December 16, 2025), the main cryptocurrencies are performing as follows: - **Bitcoin(BTC)**: $85.89K - **Ethereum(ETH)**: $2.95K - **Litecoin(LTC)**: $77.32, 24h change -3.81% - **Solana(SOL)**: $126.60, 24h change -3.53% - **XRP**: $1.88, 24h change -6.26% ## Overall Outlook ETFs represent an inevitable trend of integrating cryptocurrencies into the traditional financial system. By lowering investment barriers, gaining regulatory approval, and enhancing market liquidity, these tools are playing a crucial role in bringing digital assets into the mainstream. Despite challenges such as regulatory approval, technical tracking, and volatility risks, as the market matures and related regulations improve, cryptocurrency ETFs will ultimately become the most important link between traditional finance and digital assets.