Topic: [Manipulation 101] Market cap (to all who love repeating it these days) - page 2. (Read 1975 times)

The effect is the same regardless whether whales bought their bitcoins or not, whether Satoshi's coins are public or not

And the effect is that with Bitcoin the market cap is as irrelevant (well, mostly) as it is with any other altcoin out there. The reason for such conclusion is pretty simple and rather obvious. Only a small (if not tiny) part of all bitcoins gets traded or used as a means of payment, while the majority of coins are either stashed away or lost for good. In other words, if the reverse were true (i.e. most coins were circulating), the Bitcoin price (read its market cap) would be very different from what it is now. The bottom line is that Bitcoin market cap is as misleading as those of any other cryptocurrency

but it can not be applied to bitcoin! because simply bitcoin has been open to everyone from day 1. apart from genesis block you could mine any block that you wanted up until today. this however in altcoins which use marketcap manipulation is not true. you see a coin with 80 million coins then investigate and see 72 million coins have never been released to public for sure.

and that 1M coins of satoshi is a rough estimate and even if it is true, my point still stands. bitcoin was open to anyone who wanted to mine it from the fist generated coins.

and any bitcoin whales means they have bought it like the rest of us on equal grounds and that is a big difference in my opinion.


you can use daily volume and how it has changed!
if it is changed in the past few days, it is a pump. if has gradually gone up with price over a long period of time it is realistic investment.
add to that the real world usage such as adoption as a "currency" then you have yourself some factors to measure.

It is useless even with Bitcoin

The whole idea of market cap is meaningless itself since we don't know how many coins are actually traded, how many of them are used for facilitating the exchange of goods (i.e. as a currency), how many are lost or stashed away for years. It is like measuring the average body temperature across the hospital, you can calculate but it is as useless as it is misguiding, and still more so if count in the patients of the morgue unit. The latter refers to many billions if not trillions of left for dead altcoins that bag holders are still desperately trying to sell at however low prices in wretched places like Yobit

Yes, the market cap doesnot reveal the true market value of the coin.Its highly manipulated and its very common in altcoins.Any one can launch a coin announcing as premined and if he places a buy order at high value,then its market cap is calculated by multiplying that value with number of coins available.So,its useless to consider marketcap in altcoins.

I think it's a genuinely pathetic and shit metric, but it's hard to know what might replace it for simple reference. Perhaps some balance of trading volume vs supply but that still wouldn't be soundbitey enough for most people.

What you have shared is real and is really happening in the cryptomarket. But investors and economic players are not dumb enough not to notice such things. If I were a developer I could easily do that if I have a capital but the goal of the coin owner is profit. If I were to do that big whales will notice my schemes and nobody will no longer buy my coins. Even if the developer or the coin owner can increase immediately its status in the coinmarket cap but he have also to make sure that people will patronize his coins.

Market cap is definitely misleading but when people use it to recognise the rising trends of altcoins, that's perfectly reasonable.  There aren't many better ways to suggest what the value of a coin is because it's very hard to measure how much is actually in circulation.

I can't say that I particularly disagree with you

In fact, I have been always telling myself that market cap is utterly misleading. That said, I still have to add that you are obviously looking at only one side of the coin. Basically, what you tell is true, but it is only one half of the whole truth while the whole truth is that what you say can be equally applied to Bitcoin as well. We don't know how many bitcoins are actually circulated. But we know that 1M bitcoins are sitting idly in Satoshi's wallets, so you can safely discard them. Quite a few coins have been lost for good during all these years, and you should discard them too. Apart from that, there are a few whales who said that they are not going to sell their stashes no matter what. All this can heavily limit the number of coins actively used or traded to a rather low number, low enough to make you claims unreliable

Even though the market cap of any coin isn't true representation of value, it seems a good place to start when analysing a coin. Sooner than later, coins with high supply will bow to reducing price if they can't get enough users to mop up supply

nobody listens man!
they only see numbers without seeing the meaning behind them. they just look at a > b and how b is growing. they don't understand why b is growing and apparently don't want to understand it either.

and you are right this is how Ethereum pumps every time and now that the trick is out i am expecting lots of other altcoins to pull the same manipulation.

I moved this to Economics board since it is more appropriate to the subject and also because the main board is filled with drama spam.

I have probably said this at least a hundred times and since these days people keep repeating bitcoin share of market cap I though to make this topic, finally!

Market capitalization (market cap) is the market value at a point in time of the shares outstanding of a publicly traded company, being equal to the share price at that point of time times the number of shares outstanding.
in cryptocurrency world the "shares" are the number of available coins". and to put simply market cap is calculated by a very simple multiplication of "available coins and price.

Market capitalization, by itself, is NOT a measurement of the value of entity

A company set up to run a business will usually have money (and perhaps other assets) put into it by the shareholders in return for an allotment of shares.
a cryptocurrency however can have as many "shares" or "number of available coins" as it wants. because to put simply, it is code and you can put any number you want as the block reward, the initial block reward, the premine, and a whole lot of other methods! and you don't have to worry about taxation and other legal matters than a company faces when they issue a share.

here is how Market capitalization is a bad factor of comparison. (to those who said bitcoin has X% of market cap now):
I can start a new coin today and set the maximum number of coins to a big number, premine the coin to hold a large portion of it myself, add some "interesting features", advertise the coin by spending some money and release it.
lets say I pump the coin to 50K satoshi (it is easily done every day in the altcoin market) in which case I only need about 32 billion coins available to surpass bitcoin's market cap.
now lets assume I have a lot of money and am a good and experienced pumper and can actually pump my coin up to 0.01BTC in which case I would only need 1.6 billion coins to surpass bitcoin's market cap. and so on.

now is my coin really worth more than bitcoin? (see the example in this comment)

it is worth adding that currently there are 2 coins with 180 and 100 billion "supply" with 2 digits satoshi price. and a total of 12 coins with above billion available supply prices ranging from a couple of satoshis to 21K satoshi and they get pumped so price can go much higher.


finally with altcoin supply two things happen:
1) these available coins are really available to everyone and if it is not well thought and is really big it will crash the price.
as an example I can name Dogecoin. in this case the massive sell pressure (big supply versus a small demand) will crash the price and will always keep it down.

2) these available coins aren't really available. here is where all the manipulations come in. methods like pre-mining the altcoin, things like ICO and so many other ways of taking control of the supply so that the real (available) supply is far less than lists such as https://coinmarketcap.com show.
as an example I can name ethereum with its (apparently) no max limit coin which currently has 90 million coins available. but is it all really available?