How Does the ‘Velocity’ of a Token Relate to Its Utility versus Its Speculative Nature?

Token velocity is the rate at which a token changes hands over a period. High velocity suggests the token is being used frequently as a medium of exchange for utility, indicating a functional use case.

Low velocity suggests users are holding the token, which points to a speculative investment motive. A high-utility token is expected to have high velocity, while a purely speculative token will have low velocity as users 'HODL' (hold on for dear life).