Daily Reminder: alt "marketcaps" are FUCKING BULLSHIT and deceptive

>doubled
rather, fluctuated by a larger factor than the actual inflow and outflow of fiat into fiat

>fiat into fiat
fuck, inflow/outflow of fiat to BTC/ETH
The point is, we're no where close to actual bubble proportions in terms of fiat flow

You are really explaining this in a very confusing way. I think you might be retarded but it might just be me not understanding.
Try to explain it to me like I'm 5

>tripleposting to bump a thread
>8 out of 11 posts are by OP
This is the most pathetic thread of the day, congratulations.

Congrats on being obsessed

>He finally phoneposted to save himself face

This is true for the stock market and other markets too. About 1/20th of the total marketcap is actual fiat being pumped into the market, the rest is just inflated due to lack of liquidity. When I bring up the 2.2 billion Tether issue people scoff it off because "it's only $2.2 billion, the total market cap is $500 billion". $2.2 billion can pump the market cap a lot more than most people would think.

I'm not OP you stupid faggot

>4 posts of out 15 by this IP

This, NYSE has infinitely more liquidity than crypto so it's probably a bigger problem here but lack of liquidity can cause inflation/deflation/volatility in any market

Go climb a wall of dicks, candle-sniffing fuckfence!

I'm tired as fuck
Exactly. Now add to this the facts in the pic related in my OP:
>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

The CEO of CoinMetro also spoke about this.
Now when it comes to the alts:
>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.

can someone explain this in simple words cuz im 80 iq brainlet?

But here's the summary:

>>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 basically: fiat goes into BTC. Pumps BTC marketcap. BTC goes into alts. Pumps alts marketcaps. But no actual extra fiat was added, hence the artificial "doubling" of the alts marketcaps. The net effect is that it makes the "bubble" and correction look a lot worse than it actually is.

The most important takeaway is that a lot less fiat has actually come into the crypto market, compared to what your average normie thinks. It's probably in the region of $50bn-$100bn max, maybe much less. And the same is true for when there's a "massive correction", a lot less leaves the market than the simple marketcap calculations dictate

When you say "never touched fiat" you mean "has never been traded for fiat" or "has never moved from a cold wallet" right?
Also this doesn't explain why buying small marketcap coins is any worse - if all market caps are inflated then a small mc coin with a good product/team has even more room to grow.

OP is a fucking idiot, when you sell BTC to buy a shitcoin, it counts as a sell. he seems to believe that BTC's value stays the same once you buy a shitcoin with it.

But it does though... Sell a bunch of BTC for a shitcoin. Shitcoin market cap pumps but BTC value remains unchanged. Shitcoin market cap is fake because there isn't enough liquidity to actually sustain that price, it's just a number.

If anything thanks for bringing this up user

Well it depends what the shitcoin seller set their price at

I wonder if this person opened this thread, read my posts, and got so angry he replied with a reddit meme insult, or if it's OP. Real brain-teaser.

This is the stupidest fucking thread. Goddamn financial illiterate retards in crypto like OP trying to tell me things about shit they know nothing about.

Market cap is based off of the LAST VALUE the coin was traded, multiplied by the whole number of coins in existence.

but remember, most coins will have been bought and sold at a lot lower price than the current one, so marketcap is a very deceptive metric

>Also this doesn't explain why buying small marketcap coins is any worse - if all market caps are inflated then a small mc coin with a good product/team has even more room to grow.
Yea agreed, I was more alluding to the fact that anons think they need to chase "low mc" coins relative to the top 25, to make it this year. It's implying you won't see 100x's "because of how big the market caps are". Obviously that doesn't take away from potential 1000x's in the promising smaller mc projects, but it also means we can still see major growth in the overall market including in the top 100, and that DOESN'T mean it's a """"massive bubble""""""
In other words, we're all much more likely going to make it.

I think the misconception OP is having is that he thinks that when somebody purchases BTC with an alt they're long position shouldn't count toward bitcoin's market cap.

What I can't wrap my head around is that he's been at this for half an hour and he hasn't figured it out yet. I can only assume he's either low-IQ or very, very young.

...

Good post, and doesn't even get into the market cap created out of air from shit like hard forks of Bitcoin

If you put 10 btc in a 2 mil market cap shitcoin it's gonna pump it regardless of what price the seller sets it to because it'll likely eat up half the sell orders. But you can't sell 10 btc back at that price because there won't be enough buyers to fill that. So it's deceptive, see?

Now think about what happens when you buy BTC, then trade it for XLM, then use XLM to buy some other shitcoin like Mobius. The price of XLM nor BTC changes. At one point Mobius pumped to a 1:1 ratio of XLM/MOBI. At ~300 mil circulating supply that gave Mobius a market cap of 100 mil, all while doing nothing to the price of BTC or XLM. See why that's a problem? You're adding 100 mil to the total market cap out of nothing.

look man, I'm tired and I'm typing like a retard, but I'm sure you can read between the lines and see the key point. Or even better, open that thread in my OP and read it for yourself.
BTC's market cap is affected when you buy/sell in fiat. There's no "BTC/alt" market cap. Right? So the point is that the market caps of alts are heavily inflated in fiat terms, without a corresponding deflation in BTCs marketcap. Hence, the overall marketcap is stupidly inaccurate.
Yea, read that moe thread
>archived.moe/biz/thread/7228543
Some anons went much more indepth into it then. That OP just didn't want to freak everyone out, cause it's already a shocking revelation to average crypto trader

>OP is a fucking idiot, when you sell BTC to buy a shitcoin, it counts as a sell.
Market cap isn't based on BTC-Alt trades you fucking brainlet. It doesn't "count as a sell" because the bitcoins are still on the exchange.

it's even crazier. the price itself is pretty much arbitrary imo, which makes the marketcap "arbitrary*supply". simple example. I create a new coin with a total supply of 100 million and sell 1 million of them in an ICO for an arbitrary price of 10 cents, in other words $100k got into the market and the marketcap is 10 million and that's just the first bumb the marketcap got. In this example people like that coin for whatever reason (whitepaper/marketing/shills/younameit) so not a lot people want to sell but the demand is very high. let's keep that example simple and say that just one person sells 1000 coins because he saw a buyorder for 1000 coins at 20cents and suddenly the marketcap jumps to 20 million. in other words the marketcap is supply*(price that the last person was ready to pay) and represents in no way the money that got into the market.

If someone buys BTC with an alt, they're longing bitcoin. Period.

There is a lot of retardation and misunderstanding of minute details in this thread.

You guys need to focus on the bigger picture, which OP is right about - the """marketcap""" as we know it is a complete farce and it only takes a few million USD to pump a marketcap several billion given the current calculation methods.

We are still in the 1980s of the Internet re: crypto right now. There is a LOT of value waiting to jump in, and people holding a good quantity now ARE going to earn a lot more money.

No they aren't, where's the market cap for alt/BTC trades? If you sell an alt you devalue the alt's price relative to BTC but you are *not* raising the price of BTC relative to the dollar. Get it now?

I read it and drew the opposite conclusion of the OP. He's saying we're not in a bubble because the marketcap is inflated relative to the total amount of liquidity, but think about what you're really saying.

You're saying that a single person wash trading bitcoin to enormous valuations isn't a bubble. When a market has low liquidity you can spark massive crashes just by removing some cash. It means the market is fragile and easily manipulated by people with enough wealth.

Seems like with a concentrated enough effort you could crash this shit to nothing with only a few whales.

Yes, now the deeper point is when normies open CMC up and look at that fucking bubblegraph, what they're actually seeing is an artificially pumped and dumped graph. What the trained mind should see, is that it's not a fucking bubble. It's a correction, and people are overly pessimistic because of these terrible measures of market value.
>We are still in the 1980s of the Internet re: crypto right now. There is a LOT of value waiting to jump in, and people holding a good quantity now ARE going to earn a lot more money.
100 fucking percent.
This market hasn't seen real institutional money yet. If anything, it's seen some experimental money, but I doubt it was more than $50bn-$100bn at it's peak. What will be insane is when we start see actual inflows at the trillion dollar mark. That is when most of us are going to make fucking bank

>a lot of value waiting to jump in
from who though?

You are correct. We've already seen how fast bitcoin can crash and pump. But actual bitcoin whales don't want to crash this market, they want the bubble to expand until they're billionaires (or trillionaires) and then they'll dump. Hopefully by that point we'll have more liquidity.

I get the concern here, but that's just evidence that it's an immature but growing market. The microcosm is your typical shittcoin with low volume that pumps and dumps. But as the volume and number of participants increases, the price swings can temper down a bit. We haven't even got to the point of considering Alt/fiat pairs.

this was another point I was making. The mainstream misconception was that "it's a bubble, because all this dumb money rushed in to the market." While that is partly true, what's actually happened is a combination of say, $50bn-$100bn flowing into the market, wash-trading, and artificial doublings in the alt market caps. The net effect is that it looks like a typical bubble. The reality is that not much money flowed in and out of the market in this cycle. So the question is, was that $100bn-$150bn (being generous here) the peak of the fabled institutional money coming into the market? Doubt it. Not with the use-cases of the promising projects actually coming into play this year.
tl;dr. It's not a bubble, it was a typical market correction. The fucking real bubble has hardly started.

While you are technically right, the whole crypto market is basically a "bubble". Because all crypto ultimately have no intrinsic value, unlike fiat which you can at least exchange for goods and services. So the value of crypto is only as good as the faith it commands. If one day everyone decides to trade in their crypto folio for fiat to buy lambos or whatever, instant crash.
Think of it as a run on bank. The amount of credit (crypto market cap) greatly exceed the cash reserves (amount of fiat actually in the market).