How Does the Quantity Theory of Money (MV=PQ) Relate to Token Valuation?

The Quantity Theory of Money (MV=PQ) links the money supply (M) and its velocity (V) to the price level (P) and the quantity of goods/services (Q). In crypto, M is the token supply, V is the token's turnover rate, P is the token price, and Q is the value of network services.

Investors can rearrange this to estimate the required market cap (M P) by forecasting the network's total value of transactions (P Q) and the token's velocity (V). A lower velocity implies a higher required market cap for the same level of economic activity (P Q).