Can someone help me understand market cap?

For bitcoin to go to $20,000 does another $180 billion need to pour into BTC markets for that to happen or is that not how it works?

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check.universa.io/-3L7gDB
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coinmarketcap.com/currencies/bitcoin/
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that's not exactly how it works, but close enough because bitcoin, being the top crypto, does generally have the trade volume/liquidity to account for price movements, and has a low total supply.

but hypothetically, you could imagine an invented coin with 1 trillion coins in supply, and you sold a friend a coin for $1, then sold another for $2, the market cap goes up $1 trillion total but that much certainly was not added.

it's the other way around. It only takes one person buying at $20,000 for the market cap to go up 180bn

Market cap = last price per token X number of tokens. So that much money doesn't necessarily flow into the coin, but that much value is added. If everyone all suddenly said they would sell Bitcoin below $20, and actually did it, then as soon as someone bought a single one, the current price would be double, and the market cap would double without double the money flowing in. Market cap is a metric designed for a different asset class, so it doesn't really make sense as much for crypto, but it is good because it's easily understood and allows for a firm basis of comparison amongst cryptos

That's what I've been telling for all Veeky Forums all the time, but they still >market cap >muh market cap

Still a bit confusing. Sorry, brainlet here. But that never really happens does it? BTC price is always going up in small increments so money must be pouring into it right? For the value to go up by $1000 there has to be multiple people buying a higher priced bitcoin all the time?

are that many people believing the market cap meme? does literally none of you guys have any clue about markets? you seriously think people invested 180b$ because the price is 10k$?

I wouldn’t say $180 billion was poured in. But from $7000 to $10,000 I imagine at least a few billion is needed (or tethered whatever) to cause that jump? And surely the higher up it goes the harder it gets every time?

If there's 100 coins, and the last one sold for $1, that coin has a market cap of $100.

If someone then pays for one of those same coins for $1000, then suddenly the market cap has a $100,000 market cap even though it did not take $100,000 to make it that.

Market cap is just the last sold price multiplied by the total number of coins.

market cap is somewhat bubble
mostly air inside

Ok I get this but when people buy bitcoin they’re not buying it that much higher. They’re paying maybe $2,3 dollars more than last price, maybe less maybe more. So for bitcoin to continue jumping up and up, doesn’t an insane amount of bitcoin have to be bought (literally billions) for these thousand dollar increases to occur?

Holy fuck you're so retarded please be larping if not kys

I've been reading the white papers and I found out this crypto has John McAffee as a consultant. With a resource like that at their disposal, they are sure to come out swinging.

Guys, the money is made before coins ever hit the market. Take this one for example.

check.universa.io/-3L7gDB

Universa, 50 free coins just for making an account. Access to discounted coins before it ever touches market and goes 2-3x that value. It's guaranteed money.

I know a lot of people took a hit, but pick yourself up, reinvest, and profit.

Why so angry bruh? Just curious, I didn’t study economics or anything. I’d appreciate a solid explanation, I’ll even throw in 0.01 BTC it YOU can give me one.

This.

/thread

You don't have to study economics, you just have not to be a retard.

If you want to know how much new money it takes for the price to rise by an amount X, monitor an exchange orderbook (say bitcoinwisdom.com/markets/bitfinex/btcusd ), compute how much is sold (Y) and how much is bought (Z) over a given time period (say 24 hours, you could use a script that makes the calculation)

If the global volume is Vg and the exchange volume is Ve, then an approximation is that it takes (Z-Y)*Vg/Ve new money to make the price rise by an amount X.

For better accuracy calculate Z-Y on each exchange rather than extrapolating from just one.

Global volume can be checked on coinmarketcap.com/currencies/bitcoin/ (around 10 billion usd over the last 24 hours)

My rough guess is that it would take maybe $100-500 million of new money to make the price rise by $1,000

Did you do your meme arrows wrong on purpose Satan?

Correct.

Imagine two retards on an island. They have 10 billion grains of sand. Now the first guy sells the second guy 1 single grain of sand for 1 dollar.
They now sit on a market cap of sand worth TEN BILLION DOLLARS
ONLY PROBLEM IS THEY CAN'T CASH OUT. BECAUSE NO ONE ELSE IS STUPID ENOUGH TO BUY SANDCOIN FOR ONE DOLLAR
LITERALLY CAN'T CASH OUT

Oh thanks. Yeah this was actually the answer I was looking for.

One thing though, you say for it to rise you by $1000 it would need around $100 million. Doesn’t this number change the further up we go? Say some random shitcoin like REQ, if $100 million poured in it still wouldn’t rise by $1000. So when BTC goes up the amount needed to sustain the growth also has to increase right?

it doesn't matter if it is the last or first coin. the only thing mattering is supply and demand. if there are no coins and everybody wants them the price will subsequently rise until someone sells them. that doesn't mean if the price rises to 100$ per coin with a supply of 100 coins that the total money in the coins is 10.000$. This is just a temporary calculation of the latest bids. If the price then falls to 0.5$ because more people are offering it also doesn't mean that 5.000$ were lost or otherwise cashed out.

dont care about marketcap. just care about potential growth potential.

>One thing though, you say for it to rise you by $1000 it would need around $100 million. Doesn’t this number change the further up we go? Say some random shitcoin like REQ, if $100 million poured in it still wouldn’t rise by $1000. So when BTC goes up the amount needed to sustain the growth also has to increase right?

That depends on how many people are selling. If the price is rising really fast there are less and less sell orders above, it probably took less new money to make the price go from $10,000 to $11,000 than from $9,000 to $10,000.

At lower prices sell orders were stacked more closely together, as the price goes up they are further apart, so I don't think there is an obvious answer, it really depends on the market, on what percentage of people are holding rather than selling at a given moment, but most of the time the more volume there is the more money it takes to make the price rise or fall by a significant amount

When I said $100 million that was a very rough guess, and keep in mind that would be the difference between the total amount bought and the total amount sold, billions of usd are bought and sold every day. If banks decide to buy $1 billion worth in a day and at the same time big holders are selling the price may not move, while some other day it could take a little to make the price go up significantly, it all depends on the supply and demand.

damn, i finally understood, thank you sempai