Market capitalization is a reflection of the total number of outstanding shares (i.e., Bitcoin) times the last price someone paid to by a single share (i.e., ma

Market capitalization is a reflection of the total number of outstanding shares (i.e., Bitcoin) times the last price someone paid to by a single share (i.e., market value). There is no inherent relationship between market capitalization and the total "value" of all of the assets, as might be indicated by, say, the total money spent by each Bitcoin holder to acquire their share of Bitcoin (call this, say, "total capital basis"). Note that this applies to all asset classes, although many asset classes do have some rules of thumb that can indicate if the current market value seems overvalued or undervalued. (It should be noted that as of late, these rules of thumb suggest that many asset classes range from "overvalued" to "holy hell, where is this valuation coming from‽"). Bitcoin is somewhat unusual in that many people invest in Bitcoin primarily, if not solely, expecting to make money only by selling it off to somebody else later for a higher price--holding Bitcoin doesn't offer any kind of dividend like holding money in stocks, real estate, bonds, or even the miserly rate offered in a bank account. Thus, compared to other assets, you should be extremely skeptical that the actual "total capital basis" has any close relation to the market capitalization. (I personally suspect that the market capitalization is several multiples of the "total capital basis", and I suspect there's even less money sitting in the cryptocurrency ecosystem than even the "total capital basis").