Marketcap is real, there is no "real market cap", you don't have to try to find how much money is involved in bitcoin because it is really not something you need to be worried about, the reality is there is a market cap and there is volume and there is the price, which means people who hold all the dormant bitcoins are not willing to sell their coins for that price or maybe not even aware that they have bitcoins, all the other people are already doing trading obvious from the volume and how much people are willing to spend for bitcoin as well.
It comes down to marketcap, there is certain amount of bitcoin in existence, and there is people who buy and sell, all that calculated gives you the market cap of bitcoin or you can apply it to any other coin you want.
Topic: On market capitalization (again) - page 2. (Read 295 times)
I think if you're looking at order books, you're actually looking at a different stat altogether and to that I would say: just use volume?
That's not quite correct
I'm not looking into the orderbooks and order queues they represent. What I'm talking about here are actual trades which involved the exchange of assets and thus reflect the real liquidity of a certain market at a certain price (i.e. the particular price of a trade). That's how we can define market capitalization, I mean the real one, not the repoted figure, which is only a mathematical abstraction that has little to do with real liquidity
And as I also pointed out in the OP, we can calculate this real market cap of a coin only when the coin has already kicked the bucket by looking into every executed order, its size and price. If we have the entire trade history in this case, it won't be a very difficult task to calculate how much the coin was worth in terms of liquidity at any moment when it was traded. But that's impossible with coins that are still traded because we don't know the liquidity at lower prices
To be more accurate, the market value is not the right tool for measuring cryptocurrencies, or it is not the right tool for arranging these currencies based on many things, the most important of which is the absence of regulations that prevent scam and give real measurements of supply and demand.
As for the dependence of many sites on it, they are easy to measure and manipulate, and famous sites as CMC also have a role in introducing people to the first levels of currencies.
Even with these numbers, if we reach a good sums of market capacity with some regulations. It will be a good measure because it is difficult to manipulate.
As for the dependence of many sites on it, they are easy to measure and manipulate, and famous sites as CMC also have a role in introducing people to the first levels of currencies.
Even with these numbers, if we reach a good sums of market capacity with some regulations. It will be a good measure because it is difficult to manipulate.
But can we evaluate and measure a real market cap or is it in fact an impossible task in and of itself?
No, the right word is useless.
The market cap is a shitty shiny metric used and abused by shills and "dev" teams to promote their useless coin.
Look at the current situation and you see
No, we simply don't need this metric. It's as useless as an indicator can get, even worse than koala's density per km2.
So how can we evaluate a real market cap of a coin which is still very well alive, for example, Bitcoin?
You simply don't evaluate the market cap.
A clearer indicator about the real value would have been the transaction volume and the sum in buy orders, but with all those fakes data from one-week-old exchanges who claim billions in daily trade you can't.
So, better avoid them all, and enjoy a sunny winter evening with a cold beer knowing that BTC will always be in the first place.
I think if you're looking at order books, you're actually looking at a different stat altogether and to that I would say: just use volume?
Volume is obviously much better of an indicator and you can use vpvr or the real volume and supplement them with rsi or the stochastic to get a better estimate...
Even looking at active coins doesn't let you see the market cap as people could have yet to be discovered keys or could just be sat on funds they mined waiting for them to hit a certain figure...
Volume is obviously much better of an indicator and you can use vpvr or the real volume and supplement them with rsi or the stochastic to get a better estimate...
Even looking at active coins doesn't let you see the market cap as people could have yet to be discovered keys or could just be sat on funds they mined waiting for them to hit a certain figure...
It is not uncommon to hear that market cap is a shitty metric, while the real liquidity (dollar-wise) is way less that the reported figure. I agree with these two points. But can we evaluate and measure a real market cap or is it in fact an impossible task in and of itself? This is what I want to discuss here
Before we can purposefully and meaningfully discuss anything, we should define the subject in order to avoid confusion and possible misunderstanding. For the purpose of this topic it means defining what a real market cap actually is. Ironically, one of the ways to define it also happens to be one of the ways to measure it (provided there are indeed other ways to do the latter, of course). But the problem is, while we can certainly define it in the way described below, as a real measure it can only work in hindsight when it has already become mostly useless
So what is a real market cap of a given coin at a certain point in time? The definition is quite simple. The reported market cap of, say, Bitcoin, basically tells us how much we would get if we sold all bitcoins at the current price. It should be instantly obvious that the figure thus obtained is quite misleading and utterly deceiving because if we were to sell all bitcoins for real, the price would crash into single digits, and below. And this is exactly how we can define (and calculate) a real market cap of a cryptocurrency at any given moment
For this we should carry out a mental experiment by selling all coins and then adding up all the dollars we would thus receive at whatever price we could get all the way down until the last coin is sold. And the final total will be our real market cap at the moment we start to sell out. In practice, though, this approach is possible only with coins that are already dead, dead as a doornail. In the latter case we can examine every trade made and calculate backwards what the real market cap of that coin was at any point in its lifetime (read, while it was still kicking and ticking)
So how can we evaluate a real market cap of a coin which is still very well alive, for example, Bitcoin?
Before we can purposefully and meaningfully discuss anything, we should define the subject in order to avoid confusion and possible misunderstanding. For the purpose of this topic it means defining what a real market cap actually is. Ironically, one of the ways to define it also happens to be one of the ways to measure it (provided there are indeed other ways to do the latter, of course). But the problem is, while we can certainly define it in the way described below, as a real measure it can only work in hindsight when it has already become mostly useless
So what is a real market cap of a given coin at a certain point in time? The definition is quite simple. The reported market cap of, say, Bitcoin, basically tells us how much we would get if we sold all bitcoins at the current price. It should be instantly obvious that the figure thus obtained is quite misleading and utterly deceiving because if we were to sell all bitcoins for real, the price would crash into single digits, and below. And this is exactly how we can define (and calculate) a real market cap of a cryptocurrency at any given moment
For this we should carry out a mental experiment by selling all coins and then adding up all the dollars we would thus receive at whatever price we could get all the way down until the last coin is sold. And the final total will be our real market cap at the moment we start to sell out. In practice, though, this approach is possible only with coins that are already dead, dead as a doornail. In the latter case we can examine every trade made and calculate backwards what the real market cap of that coin was at any point in its lifetime (read, while it was still kicking and ticking)
So how can we evaluate a real market cap of a coin which is still very well alive, for example, Bitcoin?
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