ATH in price is only one side of the coin. the other is market cap.
in 2013 the market cap was ~12B at its peak, and litecoin was less than $100M.
today bitcoin is almost $19B, and the next 5 top coins have a combined $2B.
cryptocurrency as an entire sector is up 8 *BILLION* dollars, or ~66% since the 2013 peak.
$8 billion has NOT been poured in since 2013. Supply in all of those coins have risen essentially people hodling = marketcap rising. I bet less than a few hundred million $ has been put in but essentially people are willing to hodl coins more and more as they lose trust in the governments and services appear that allow you to bypass fiat and spend your crypto anywhere fiat is accepted.
duh, thats how market cap works.
Yea i guss.. its just that many people end up making it seem like 8 billion has been poured in when it has not. The cap increases for sure..
So heres an.interesting thought experiment. What if you decreased supply to keep cap the same.but raise the price? Would that still be the same? I would say that there is a fundamental difference.between the two in that in one the opportunity cost changes and essentially goes back to the idea that velocity drives the true value of money. If supply increased but people held.. the opportunity cost is less than if 8 billion was put in to drive the cap up while supply remained static. The extra liquidity increases opportunity and thus you cant say increasing cap.via decreasing supply == increasing cap via increased liquidity and thus price.
If people held - that does not decide the price of the extra supply.
Price is determined by what people are prepared to buy the available supply at. If that supply increases, then it does not matter if everyone who has the existing supply holds, the price becomes the price that the (increased) available supply is bought at.
Increased supply (if demand does not change) will normally decrease price. The holders do not affect this, the buyers (and sellers) of the available supply do. Decreased supply will normally increase price if demand is constant.
Market cap is useful in any traded asset, in that the measure is always the same; number of units of the asset that are available, multiplied by the current price of an available unit that the market will pay. Any asset where units are uniform, that is reasonably easy to obtain with a known market price can be valued like this, thus it is a valuable metric.
Saying 'the money was not actually paid' is not relevant as this applies to all of such assets. Apple shares are not all traded every day, many are held by pension schemes, but the company is still valued as the price of its issued shares multiplied by the number issued.
If the price goes up, then the value of all the available units is more valuable.
We all see our coins as 'worth' the current price. So we all believe in the market cap being an accurate measure. Of course if everyone sells price will not be maintained, and the same applies if no one sells. Supply and demand affects price and market cap equally, therefore it is a useful measure.
