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There's no such thing as a "market cap" for Bitcoin - seriously, give me a definition of "market cap" for Bitcoin that makes any sense at all compared to someth

There's no such thing as a "market cap" for Bitcoin - seriously, give me a definition of "market cap" for Bitcoin that makes any sense at all compared to something like the future value of cash flows from UNH equity.

account73466 7y ago
Not my definition but the accepted one is price times number of bitcoins mined so far. Of course by selling 1% of all bitcoins you would clean all order books. However, George Soros used only a few billions to bet against the British pound.
- mikeyouse 7y ago
  Which is nonsense since so many bitcoins have been lost and there is no underlying asset that owning a bitcoin grants you access to.
  - darawk 7y ago
    Sure, but that just makes Bitcoin's market cap smaller, and therefore its expected trading volume relative to similar assets even smaller, and therefore the original commenter's point even more accurate.
- kelnos 7y ago
  > Not my definition but the accepted one is price times number of bitcoins mined so far. Right, but that's essentially a lazy re-definition of the term. I get that it's a bit wordy to always say, "the current total value of all bitcoins is $X billion", but market cap is specifically about the total value of a security's outstanding shares. If people want bitcoin to be treated seriously as a currency, they should stop using terms that explicitly refer to non-currencies. To put it another way, no one would reasonably talk about something like the "market cap of the Euro"[0], so why would you do that for something else claimed to be a currency? [0] Entertainingly, when I search "euro currency market cap", most of the results that come up are related to cryptocurrency.
  - account73466 7y ago
    I guess that one of the reasons for this notation is because Bitcoin is not yet a currency in its common sense (e.g., freely used within a country to be exchanges for products and services) but a speculative asset.
  - Melting_Harps 7y ago
    > To put it another way, no one would reasonably talk about something like the "market cap of the Euro"[0], so why would you do that for something else claimed to be a currency? Oh, but they do: https://www.dailysabah.com/finance/2017/12/06/bitcoin-renews-all-time-high-surpasses-ruble-and-sterling-to-become-6th-largest-currency-by-circulation https://www.dailysabah.com/finance/2017/12/06/bitcoin-renews... And while Market Cap may be on its surface misleading, its mere semantics, and is really in reference to what you've described; its just that as you said, its a currency and itself cannot have a strict Market-Cap but its a succinct way to describe the totality of its valuation for all issued satoshi's--which again, is misleading because of the 21 Million, its likely several million are lost forever.
    - kelnos 7y ago
      Er, the article you linked does not even once use the term "market cap" to refer to anything. Semantics are important. Often perception and optics are just as important as reality. Something that's been a hard lesson for me several times in life...
whack 7y ago
The market cap for UNH isn't calculated using future cash flows. The market cap for any security, by definition, is price-per-security * number-of-securities. Similar valuations also exist for gold-funds, which also have no cash flows. You can argue that asset prices should be derived from future cash flows, and hence, both Bitcoin and gold should be almost worthless. But that has nothing to do with the formula for computing any entity's market cap
- JumpCrisscross 7y ago
  > The market cap for any security, by definition, is price-per-security number-of-securities Market cap is an equities concept. The market value of a series of bonds isn't the issuance's market cap. The notional value of all options on a symbol is only useful to operations/settlement folk. For Bitcoin, "market cap" is meaningless. It's too thinly and opaquely traded. Better would be flow of funds, i.e. value of new money flowing into and out of the system. Put another way, if you bought all the shares in a company, you'd have the company. If you bought all the bonds of a company, you'd own the debt. The aggregates have meaning. If you bought every Bitcoin in existence (or dollar, for that matter), you would have nothing.
  - account73466 7y ago
    >> It's too thinly and opaquely traded That claim about "thinly" contradicts the numbers given in my post above.
    - JumpCrisscross 7y ago
      > That claim about "thinly" contradicts the numbers given in my post above Most Bitcoin volume is non-economic [1]. Some of it is fraudulent printing. Some of it is wash trading. That said, I don't doubt Binance's figures. The problem with taking a few trades and multiplying it by the outstanding coinage goes back to the aggregate being meaningless. [1] https://www.sec.gov/comments/sr-nysearca-2019-01/srnysearca201901-5574233-185408.pdf https://www.sec.gov/comments/sr-nysearca-2019-01/srnysearca2...
toomim 7y ago
Market Capitalization: The amount of capital allotted an asset in the market. This can be computed as number-of-coins x price-per-coin.
- tuesdayrain 7y ago
  This could result in the common misconception that market cap is equal to the influx of money into an asset. E.g. market cap increasing by 5bil doesn't mean that 5 billion worth of currency was invested into it.
  - account73466 7y ago
    It could. However, you average Joe crypto hodler from reddit understands this phenomenon, e.g., after reading about Tether & friends.
justinmeiners 7y ago
(number of bitcoin) * (price per coin).

account73466 7y ago

Not my definition but the accepted one is price times number of bitcoins mined so far. Of course by selling 1% of all bitcoins you would clean all order books. However, George Soros used only a few billions to bet against the British pound.

mikeyouse 7y ago
Which is nonsense since so many bitcoins have been lost and there is no underlying asset that owning a bitcoin grants you access to.
- darawk 7y ago
  Sure, but that just makes Bitcoin's market cap smaller, and therefore its expected trading volume relative to similar assets even smaller, and therefore the original commenter's point even more accurate.
kelnos 7y ago
> Not my definition but the accepted one is price times number of bitcoins mined so far. Right, but that's essentially a lazy re-definition of the term. I get that it's a bit wordy to always say, "the current total value of all bitcoins is $X billion", but market cap is specifically about the total value of a security's outstanding shares. If people want bitcoin to be treated seriously as a currency, they should stop using terms that explicitly refer to non-currencies. To put it another way, no one would reasonably talk about something like the "market cap of the Euro"[0], so why would you do that for something else claimed to be a currency? [0] Entertainingly, when I search "euro currency market cap", most of the results that come up are related to cryptocurrency.
- account73466 7y ago
  I guess that one of the reasons for this notation is because Bitcoin is not yet a currency in its common sense (e.g., freely used within a country to be exchanges for products and services) but a speculative asset.
- Melting_Harps 7y ago
  > To put it another way, no one would reasonably talk about something like the "market cap of the Euro"[0], so why would you do that for something else claimed to be a currency? Oh, but they do: https://www.dailysabah.com/finance/2017/12/06/bitcoin-renews-all-time-high-surpasses-ruble-and-sterling-to-become-6th-largest-currency-by-circulation https://www.dailysabah.com/finance/2017/12/06/bitcoin-renews... And while Market Cap may be on its surface misleading, its mere semantics, and is really in reference to what you've described; its just that as you said, its a currency and itself cannot have a strict Market-Cap but its a succinct way to describe the totality of its valuation for all issued satoshi's--which again, is misleading because of the 21 Million, its likely several million are lost forever.
  - kelnos 7y ago
    Er, the article you linked does not even once use the term "market cap" to refer to anything. Semantics are important. Often perception and optics are just as important as reality. Something that's been a hard lesson for me several times in life...

whack 7y ago

The market cap for UNH isn't calculated using future cash flows. The market cap for any security, by definition, is price-per-security * number-of-securities. Similar valuations also exist for gold-funds, which also have no cash flows. You can argue that asset prices should be derived from future cash flows, and hence, both Bitcoin and gold should be almost worthless. But that has nothing to do with the formula for computing any entity's market cap

JumpCrisscross 7y ago
> The market cap for any security, by definition, is price-per-security number-of-securities Market cap is an equities concept. The market value of a series of bonds isn't the issuance's market cap. The notional value of all options on a symbol is only useful to operations/settlement folk. For Bitcoin, "market cap" is meaningless. It's too thinly and opaquely traded. Better would be flow of funds, i.e. value of new money flowing into and out of the system. Put another way, if you bought all the shares in a company, you'd have the company. If you bought all the bonds of a company, you'd own the debt. The aggregates have meaning. If you bought every Bitcoin in existence (or dollar, for that matter), you would have nothing.
- account73466 7y ago
  >> It's too thinly and opaquely traded That claim about "thinly" contradicts the numbers given in my post above.
  - JumpCrisscross 7y ago
    > That claim about "thinly" contradicts the numbers given in my post above Most Bitcoin volume is non-economic [1]. Some of it is fraudulent printing. Some of it is wash trading. That said, I don't doubt Binance's figures. The problem with taking a few trades and multiplying it by the outstanding coinage goes back to the aggregate being meaningless. [1] https://www.sec.gov/comments/sr-nysearca-2019-01/srnysearca201901-5574233-185408.pdf https://www.sec.gov/comments/sr-nysearca-2019-01/srnysearca2...

toomim 7y ago

Market Capitalization: The amount of capital allotted an asset in the market. This can be computed as number-of-coins x price-per-coin.

tuesdayrain 7y ago
This could result in the common misconception that market cap is equal to the influx of money into an asset. E.g. market cap increasing by 5bil doesn't mean that 5 billion worth of currency was invested into it.
- account73466 7y ago
  It could. However, you average Joe crypto hodler from reddit understands this phenomenon, e.g., after reading about Tether & friends.

justinmeiners 7y ago

(number of bitcoin) * (price per coin).