Hello,
Ok so, everytime you take a look at a coin's price prediction with a google search, like for instance Cardano, you always have the hopeful heard that says "10$ by the end of 2018!" if not more, while some more rational people will say it's not possible, 2$ max, because with the supply of coins (which is 25 billion for ada according to cmc), a 10$ share would mean a 250 billion market cap.
So in essence, rationally, you can sort of predict a coins price by simply looking at coin supply and doing basic math.
Yet, it is a known fact that Ethereum for instance has no coin limit. Although there are not as many coins as Ada (about 100 million to round it up), people are today still ready to pay up to 1400$ a coin, which means an MC of 140 billion USD not a week ago. I'm pretty sure that 1400$ is still the lower/middle end of what 1 ETH will be valued at some point. Heck, it was barely worth 7$ a year ago, and I bet you people were saying the same thing back then "1000$ not possible".
Same thing with the global market cap, what were people saying 3-4 years ago? I bet a trillion market cap seemed pretty impossible.
History repeats itself. People are not rational when it comes to cryptos and we are still in what you could call early stages. It's only been what, a few months now that Bitcoin has gathered interest from the masses. What's your impression? Is marketcap really an indicator? Because when you take a look at Cardano, it looks like a waaay better version of ETH. And as much as I like Ethereum, it's starting to show it's weaknesses and I feel the roadmap and general news about the coin don't make up for the price of 1400$.
So yeah, just curious to see what other's think.
Cheers
Market Cap equals the product of the current coin supply & the current coin price.
For instance, Ethereum is at $1030. Its final coin supply is unsure, but its current coin supply is clear; 97 million ETH. Therefore, the market cap of Ethereum is about $100 billion.
Of course, it's not a perfect way to predict a coin's price, but it's far more accurate than simply looking at its price. The market cap indicates how much money is invested in a coin and how much demand is there.
If you multiplied the supply by 1000, the demand would have to grow 1000 times too, to reach the same price as before. The price doesn't show anything about its demand/supply. It simply shows how much people are prepared to pay for it currently, which isn't a good indicator of future price movements.