Topic: What happend if total capital market of cryptocurrency reach $ 1T (Read 220 times)

Cryptocurrency market will probably be the new playground of many investors if eventually the $1T market capitalization is reached. A lot of people would eye the prize. And start investing and trading even more.

  Please dont make this conversations more funnier. How is that even possible to think.

What I mean when I say that a market cap is a rough snapshot is that it just shows the total sum of potential value, not realized value, if the entire asset was to have all of its tokens liquidated at the current market price. It doesn't help when we have such a large variety of coins which each have their own uses, supplies, and rules to govern each of them individually.

The big difference as to why market cap for stocks is a decent metric for guesstimating and not for crypto relates to what I just said; cryptos have variety in their rules and concepts, stocks do not.

A stock with a small market cap but operating as a productive company and bringing in a revenue an x% the size of a large company could comparatively have a market cap in a 2-4% range of the larger one, and then if it is under it could be seen as undervalued and if it is over it would be overvalued, so on and so forth. Same goes for comparing individual stock prices.

Market cap is also great for companies since it helps investors see just how much money is embedded within a certain company, consequently how much their own money impacts the stock and how much investment potential may exist.

None of what I have said in my last two paragraphs has any sort of relationship when it comes to crypto. That is why market cap is a bad metric of measurement for cryptos; because it was made for something completely different which could be used as overall comparisons and numbers for a bigger game. Crypto doesn't have ANY of those same traits or comparisons.

I have included a link below, in plain text with some address portions spaced apart so you can read it and it doesn't get blocked, which demonstrates why market cap has more value in stocks, and I hope you can extrapolate why it is less effective for crypto.

https://www. fidelity .com/learning-center/trading-investing/fundamental-analysis/understanding-market-capitalization

This is also the longest post I have written in a long time so thanks for that, it's not often I really get to grind into something and talk about it on here.

Fantastic post!!!  THIS is productive.  Again, I am new to the crypto currency world...but my education and trading experience in other tradable markets goes back nearly 20 years.  So, yes I am a 'newbie' on here...but I am confident my experience can be of some minimal value as ideas get bounced around.

Back to the topic...seeing that I am new to cryptos... can you help me understand why you feel there is no value in crypto world versus any other value that tool may (or may not) have in other asset classes, like FOREX?     Because, when I am looking at a market cap..the information i am seeking is EXACTLY how you classified it: simply a rough idea of an assets 'value' at any given snapshot in time.    Why would the value of knowing that information be different for a coin versus a currency or stock or whatever?  

The more research i do, the more and more i realize the crypto trading world (and just in general) is much different than other markets.  I am finding there are many different things to take into consideration as i start to put some small money at work here...especially in very short term scalping trades.  granted, these coins may not have revenues like GOOG or whatever...but still...the price of the coin is still its perceived value at any given moment in time.  In that sense...why is it any different than any other asset class? All the formalities and technical stuff aside...should a short term trader care how its fundamentally different than a stock or futures trading?  


(and just for full disclosure for whatever its worth..i own small amounts of BTC and ETH as well as a scalping position in BNB/USDT hoping for decent bounce off upward trending support line on 6hr chart)

Legendary member means we've been around for a long time and RNGesus blessed us with a good roll on getting the status, provided it is not always changing at 740 activity now.

The thing with your statement that you can use the market caps to compared to each other somehow is fallacious at best, there is nothing to compared beyond getting a rough idea of just how much money an asset is worth in a certain asset at a snapshot in time. It can change very rapidly and this goes doubly so for small cryptos, since they can go up and down off of the results of just a few buy or sell orders. It's a representative factor of the last order value * the number of assets.

Have you ever wondered by a majority of price aggregation and average platforms do not include the market cap? Because it is something not worth paying attention to in the grand scheme of things.

Thinking there is some sort of arbitrary "It should be worth x% of Bitcoin" is a terrible means of considering investments in cryptos, since there is no revenue to go off of like a traditional stock with a company behind it. Even as a "jumping point". There is no value in looking at those metrics in these environments like there is in FOREX or otherwise.

EDIT: Weird-ass formatting

if that happens it will get better for crypto currancy and more people will be interested in crypto currancy, I think it's well marked for the future and the development of crypto

The market cap is a total sum of the price of an asset times the number of unique asset pieces that exist.


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which is exactly the same analogy i used with my having 5 of something worth 100 each.  

I understand what a market cap is.  And i am arguing that it does have some value in comparing 2 different things.  even if it is 2 things that have nothing to do with each other.  how much value?  again...i'm not making investing decisions on it, but its simply a little nugget of information within a much bigger picture.  that's it.  a small tool in a huge tool box.



ahh my apologies...and here i thought we were having a somewhat intelligent conversation/debate about something...

because we all have much to gain in the crypto world from personal attacks and slinging mud (cant speak for anyone else, but thats why I found my way to this forum...a healthy, productive exchange of ideas, opinions, knowledge, etc...did i come to the wrong place?) ...good example from someone with 'legendary' status

Thank god! Someone with a brain that can take over. I’m leaving this thread. It’s making my head hurt.

Dude what

The market cap is a total sum of the price of an asset times the number of unique asset pieces that exist. It's not some metric for comparing how valuable some cryptos are versus others and trying to use some kind of ratio for it. The DOW is something completely different and is a giant mass of the values of every asset (or 1x of every unique asset) included within it being added together and displayed as the DOW Jones' value, not a market cap.

Let me explain market caps like this: if I have a crypto with 100 tokens, each at $1, and a crypto with 1 token, at $100, one of them is valued at a market cap of $100 and the other at $100 as well. Under your thinking, they are the same and they both have the same potential for growth. But the token with 100 pieces at $1/piece has a much higher chance of growing, and with larger percentage gains, than the token at $100. This shouldn't be that hard.

That’s a good one, let’s use ETH vs BTC. Can all of the people owning and using ETH also own BTC? Of course, so it’s usless to compare their market cap looking for growth potential because it could be the same people. It is possible that Bitcoin lovers hate Ethereum so none of them will ever use ether. So comparing market cap tells you nothing about growth potential because you will never steal bitcoin users over to Ethereum. Bitcoin is a currency or a commodity and Ethereum is a vehicle for smart contracts. They aren’t even used for the same thing. You can’t compare the market cap and find out anything useful about potential growth because that would be like comparing the pharmaceutical industry to banana plantations. Just because the market cap of the pharmaceutical industry is more than banana plantations does not mean there is any room for growth in banana sales. Do you see what I mean?

I dont know..i feel it has SOME value.  I see it as a kind of starting point?  A very broad base from which to grow an opinion from?  and using your analogy starships and automobiles...  (going VERY hypothetical here, lol...) lets say the market cap of starships is 200B and autos  2 T .... starships' rough estimate of value is 10 % of the autos.  But maybe i think starships could be as big as autos...or half as big.  Using that broad opinion...i can look at market cap and see its at 10% the 'value' of autos...i think it should be 50% eventually...  so, by using the market caps of the 2...i see perceived value in starships.  Now, i certainly wouldnt make any investing decisions based solely on market caps of anything...but again...i see it as a jumping off point in certain situations.

I can use it now in my research on ETH...i think versus BTC it has more potential and room for growth...so i could look at the market caps of the 2, compare them, and get a very rough estimate of ETH value vs' BTC...then go from there.


and to give my opinion on the original question...nothing.  the same that happened when dow hit 25k.  news outlets talk about it for a few news cycles, then it becomes 'old news' and back to business as usual.  maybe get some dumb money chasing the rockets....

Right! That’s why you don’t use market cap as a metric for stocks, commodities or currency. It’s only valuable for showing the size of a company and it’s dividend class. It tells you nothing useful about stocks, just like it tells you nothing useful about bitcoin. Comparing the s&p to bitcoin is like comparing starships to automobiles. Sure they are both for transportation but that’s where it ends.

"It only tells you what bitcoin is priced at based on the current number of coins in circulation."   .....  that EXACTLY the same information that market cap of any stock would tell you.

Its the same information conveying the same thing.  Its simply used as a comparison tool to compare different asset classes and gives a rough 'value' of said stock/coin/indice/etc.  If i have 100 of something and each one is worth 5 bucks... then my 'market cap' is 500 ..... stop over complicating this.  its a rough comparison tool.  S&P500 market cap is 10T ...crypto's 700B ...ok that tells me the crypto market is about 7% the size of the s&p in terms of 'wealth'.   (and i only use that comparison for analogy sake ...not commenting on the crypto or s&p for the sake of this post )

At first, some random newbie (not in forum rank but in cryptocurrency) will shout like hell in this forum that "Hey everybody, Bitcoin's marketcap reaches $1T! blah blah blah" Then later on no one cares. The marketcap is just a number. Nothing's so special about that. It does not even justify anything significantly.


I hope so too. They care so much about the marketcap even though it's just mere numbers.

Ok, I’ll give you that. How would you know if don’t understand what a market cap is.

Market cap is used to set investor expectations and shape investment strategy. There is no official barrier for different categories of stocks based on size, but large caps are often companies with market caps over $10 billion, mid cap is $2 billion to $10 billion and small cap refers to companies under $2 billion. Different types of investment strategies focus on the various market cap groups, and different valuation methods are applied depending on company size. Very large market caps are usually associated with mature, low-growth companies that pay dividends. Small caps are often growth companies with higher-risk profiles and generally do not pay dividends.

For bitcoin market cap tells you nothing about maturity, nothing about potential growth, nothing about user base, nothing about true value, nothing about whether it’s a good investment or not, nothing about size. It only tells you what bitcoin is priced at based on the current number of coins in circulation. So essentially it’s the same thing as looking up the price except to find out the current price using market cap you need to divide out the cap and total coins to find out the price. Why don’t you just look at the price first without doing all that work?

My opinion in this one is that nothing will happen in that situation. Market Capitalization is just the measurement of how much is circulating in blockchain.

For the record, it will not improve anything, it will not alter anything. It just a measurement. Don't push it.

Nothing, just another psychological barrier breached by crypto which is deemed impossible by traditional investors years ago, but what would be interesting is how would the plethora of investors see this or turn this into their favor. There can be a positive outcome for such an event, knowing that people are attracted with glitz and glam, and most importantly, bigger valued things. The cryptocurrency market might be the new playground of institutional investors if the psychological $1-T market capitalization is reached. More eyes on the prize, of course.

might be because I'm newbie, but I don't quite understand your point. what's wrong with the use of market cap? how would you calculate the total worth of the market? coin price alone means nothing cause there can be 1 coin or 1 bil coins. coin supply alone doesn't say anything either without knowing it's price. but if you multiply the coin supply with the current coin price you get how much money the market is worth in current prices.

then it would still only be 1 / 10th .... 10% of the s&p500 market cap of roughly 10 T

long term growth potential is huge...assuming crypto's are here to stay and will only become more and more a part of everyday life.

Blockchain technology is certainly here to stay and is all connected with AI, the Internet of Things, the automation of aspects of daily life, etc.... (which is probably why ETH is testing new ATHs while other crypto's still consolidating)

1T market cap for crypto market is nothing, long term imo

What will happen? Nothing, it's just the next step. Nothing surprising will happen. And dominance of BTC will not fall under 20% i guess.