What Is the Concept of ‘Token Velocity’ and How Does It Relate to Value?

Token velocity is the rate at which a token changes hands over a given period, essentially how often the average token is used to facilitate transactions. High velocity (tokens changing hands quickly) suggests a low holding incentive and can suppress the token's price, as less capital is 'locked up' in the token.

Low velocity (tokens held for longer) suggests high utility, staking, or strong belief in future value, which supports a higher price for a given network value.