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Easy: $1 invested does not equal $1 in market cap. Not sure where I read this, but there was a post where a guy wrote he invested $5,000 in a coin and it increa
by charlesdm 9y ago
Easy: $1 invested does not equal $1 in market cap. Not sure where I read this, but there was a post where a guy wrote he invested $5,000 in a coin and it increased the market cap by $4m.
- ricardobeat 9y agoThis is also true for stocks. As a buy pulls the latest price up, all of the other shares are worth more, and the opposite is true: for every sale, the price might slip down a bit; in the event of a large sell-off, you end up reaching zero value a lot earlier than everything can be sold off. Market cap is a bit of a fantasy metric, but has utility - just less so for crypto where you can't make any comparisons to tangible assets, liabilities or even market potential.
- granaldo 9y agoTrue for coin with low liquidity which is why chart ranking solely based on market cap is inaccurate, an alternative is https://www.coingecko.com/en https://www.coingecko.com/en If the orderbook is thin and supply circulated is plenty, the market cap moves by the tradr
- latchkey 9y agoMarket cap is a useless number in the crypto world that people quote because it sounds nice. It is simply current price * number of outstanding shares [1]. It has no reflection on the actual money being put into the market, which is what people would like to transform it into in their heads. [1] https://www.google.com/search?q=market+capitalization+definition https://www.google.com/search?q=market+capitalization+defini...