The marketcap of the entire crypto market is a complete and total lie and I'll explain to you why. First let's begin with why the marketcap of bitcoin itself is completely inaccurate, and just as a reminder, marketcap is a simple calculation of circulating supply multiplied by the spot price. Here's why that's total bullshit:
Firstly, you can remove 1 million BTC from the circulating supply right off the top, which is the Satoshi wallet which can never be touched or it will crash the entire market just on the news that it's active. Then, there is an indeterminate number that is very likely very large of coins that were mined very early on in very large numbers and lost forever in wallets that will never be recovered. There are likely at least a couple of million BTC in dead wallets mined by people in the CPU and early GPU days as a novelty that they forgot about or lost for whatever reason. We can probably safely assume that at least 3 million and perhaps upward of 5 to 6 million BTC are lost and irrecoverable for whatever reason. Now again, marketcap is calculated by circulating supply multiplied by the spotprice.
This presents a problem because BTC has never once in it's life actually been subjected to an organic level of price discovery, it's always been heavily manipulated during a time when the majority of the value of BTC was from mined coins that had never once touched fiat. You might recall the recent MIT study that showed that the price run up from $100 to $2000 was orchestrated by a single individual doing wash trades with himself. The point here is that the current spotprice of BTC is not AT ALL reflective of a fair market evaluation of it's price as a utility, but merely as a speculative instrument and thus the "market cap" is completely and utterly false because any significant movement of BTC volume into fiat will have a disproportionate effect on the "market cap" of the coin, since the order books are far, far, far thinner than anyone actually realizes due to the effects I've enumerated above about the circulating supply and actual volume of coins exposed to fiat being exceptionally lower than anyone generally realizes or acknowledges. Now on to the alt market:
All of the alts with the exception of Ethereum and to a lesser extent Litecoin are merely doublings of the fiat value of their respective fiat on ramps. However, even Ethereum was only obtainable by purchasing with BTC or mining it for a significant period during early adoption, giving us another example of a thin market that has never actually seen any significant organic price discovery of the underlying asset's utility value. So, we can safely estimate roughly 50%-60% of the circulating supply of ETH has never touched fiat, and upwards of 95%+ of alts have never touched fiat whatsoever. Thus, at the very least, 70%-80% of the alt market DOES NOT represent an actual influx of fiat into the market, but a mere artificial doubling of the fiat price of the fiat onramps used to purchase those coins. Meaning, when you buy BTC to buy an alt, fiat value goes into the market raising the "market cap" of BTC, but when you purchase your alt with BTC, the marketcap of BTC doesn't go down to represent a transference of fiat value to that alt, it merely pumps the "market cap" of that alt, artificially doubling the "market cap" of the entire crypto market.
So, are we in a bubble? Well, I would say no we're not, because this market is absurdly thin compared to the perception of it's value due to the effects described above. The reason this market is so insanely volatile, and the reason there is such a stark crash from such a sharp peak, is that there is in reality likely a mere $60 to $120 billion of actual fiat in the ENTIRE crypto market, and perhaps even less than that depending on the actual circulating supply of BTC, and especially the circulating supply that's actually feasibly exposable to exchanges, even assuming the owner still has access to the wallet.
It's quite obvious to me that the marketcap of the entire crypto space is an absurd illusion, and that even 10 years on we haven't even seen a minuscule fraction of a percent of the adoption potential of this technology in the public space. Even at the height of the peak when shills on MSNBC and CNBC were pumping BTC with FOMO sermons, we probably never exceeded even 200 billion in actual market capitalization worldwide, at the very best.
The overall point here is that the public awareness and adoption of blockchain technology, and the real fiat value of the entire crytpo market is ABSURDLY lower than anyone generally realizes or acknowledges. Coinmarketcap is complete and utter bullshit. Assuming that alts in the top 50 or even the top 10 "have no room to grow" because of their "market caps" is completely asinine. Most notably, thinking that we've even BEGUN to enter into the institutional money phase when the actual MC of the entire crypto space is probably no larger than $120 billion at best is also completely foolish and ignorant.
This "major correction" or "crash" will hardly look like a blip on the radar when we see direct fiat to alt channels open up and people begin to actually invest into projects with working products and platforms, and we will likely see alts 50x to 100x their current artifical and completely bullshit "market caps," even in the top 10.
No shit we haven't peaked yet Was it necessary to drag that out for so long?
The CoinMarketCap sshit is whatever too. More than likely to be an error on your part rather than on theirs.
Good read thanks OP So according to you we have several years of mooning ahead us?
holy fucking shit a good thread on Veeky Forums
>This "major correction" or "crash" will hardly look like a blip on the radar when we see direct fiat to alt channels open up so. fairX?
i said btc 100 $ eom! you filthy gentile!
>We can probably safely assume that at least 3 million and perhaps upward of 5 to 6 million BTC are lost and irrecoverable for whatever reason >source: my ass
hah, i fucking wish
t. 20k pfr
My UBS broker (handles billions) is just NOW having a team research which coins/tokens are worth investing. They are not even at the stage of creating a prospectus. Institutional is playing the waiting game, for now (other than Theil and some others). Summer will be interesting, especially if we have a large selloff in the traditional markets/housing drop.
Interesting read. I saw this post before but didn't have time to read so thanks for posting again. but I am not sure what to think about the implications of that. Basically you are saying we won't reach a 'fair' price until the early whales have cashed out and real money has been used to buy their coins? Crypto is definitely here to stay but it may take a while to reach lamboland.
>this fag posting again
You dont need to post a bible to know that marketcap is just an indicator not a true factual number.
If some retard bought btc at 19k that doesnt mean that all coins were bought at 19k, only that the last ones were bought at 19k.
I wouldnt even put it past 5k the average price paid for btc ever historically.
Market cap is a meme. People think this is like a pool of money somewhere for some specific shitcoin.
If I put $20k to wipe the entire sell book of Confido up to $10 per token, then you would say Confido is a market worth $90 million? (9M circ supply)
Volume, demand and supply is everything that matters. Not even supply because $1k worth of something is $1k, be it on Ripple or be it on Monero.
Nice just bought 100k
So we basically have a few years left to make easy money.
The market cap of every crypto combined is smaller than one large company.
This is only true for crypto.
In finance market cap can be calculated using discounted cash flow of the firm and physical and intagible assets/capital.
Crypto generates no revenue/dividends and there is no capital or assets behind it so this calculation doesn't make sense.
For example, when a company goes public, analysts will calculate market cap, then divide by number of shares they want to issue to get a price (ie market cap is the first step, then price comes last). In crypto really only price and circulating supply matters, market cap is useless youre right
Total market cap doesn't need to be accurate, it's an indicator of how much money is moving in and how much is moving out.
I don't think people really care what the actual total price is, just it's fluctuations as a determining factor for how the overall coin market is doing.
Even if you start today, you're early to the party. So many neets, weirdos and libertarian/ancap types are going to be millionaires (in fact I predict the first trillionaire will come from the cryptocurrency world... just like personal computing brought us Bill Gates and eCommerce brought us Jeff Bezos) that it's going to change the whole fucking way the world even works.
Everyone here, even those poorfags who invested their first $100 today are going to be filthy rich in 10 years...
Union Bank of Switzerland private broker under UBS umbrella
>Le we are the early adopters Is this what bottom of the pyramid retards tell themselves?
The only problem with that is we don't know exactly how many bitcoins have been "lost". We have no reason to assume that there are millions of lost coins, but who knows.
>My UBS broker (handles billions) is just NOW having a team research which coins/tokens are worth investing. They are not even at the stage of creating a prospectus.
they are letting us be the guinea pigs testing the water before they swoop in, regulate where they can, and clean up.
It's more that they do not understand the varying implications or technologies. They seem really caught off guard and playing catch-up.
seems highly unlikely because there would be millions of new millionaires from crypto alone
true. blockchain tech is left field and the financial aspect came out of nowhere.
It's going to be a weird fucking world. Wagecucks, especially highly trained and overworked people like lawyers and doctors are going to be so fucking angry.
>it's an indicator of how much money is moving in and how much is moving out.
That's the point, read the fucking OP. It's not an accurate indicator of how much money is moving in or out at all.
So we should just ignore market cap to a certain extent and invest in solid projects, even ones that are high on the list such as ETH?
you are absolutely right- thanks for writing this.
when instituatianl money enters and then the public we will maybe have real 1 trillion usd in the market. but that will take time. and right now I would say maybe 50 billion max