/biz/ - Business & Finance

[Anonymous No.7700692]

Brainlet here. Can somebody tell me about market capitalization?

What it is? how it affects currency's and the way the potential buyers look at said currency?

I've seen many people discuss it on here with varying opinions but I'm still not sure I've grasped it.

[Anonymous No.7700732]

You won't get super rich off a currency like Bitcoin or Eth due to the market cap already being so large. It's like trying to buy Amazon stock and thinking you can become a millionaire if you hodl it long enough. Don't be a retard like the guys who show their blockfolio with top 10 coins.

Coins with low market caps like Digibyte, Vertcoin, and Decred have much more room for growth and a realistic projectory for you to gain moon missions, but high rewards come with high risks

[Anonymous No.7700772]

Market capitalisation is the supply X price. It's more important with stocks generally but even in crypto the company still has to have a successful ICO to start with a big market cap. Naturally as the price rises due to demand, the market cap increases with it.
Generally cryptos with big market cap are the more established ones while those with a smaller one have a greater potential for growth. Don't look at the price, look at the market cap.

[Anonymous No.7700786]

It doesn't matter, marketcap doesn't apply to crypto and it's just last price * circ supply
A lot of retards last year used the "muh marketcap" meme to claim that xrp, ada, and a lot of other shitcoins would never hit 1$ just to get btfo'd later on

[Anonymous No.7701370]

>>7700692
It's very simple brainlet bro. Let's say you have 100 coupons that each give you $1 off the purchase price of a Family Bucket at KFC. Your coupons have a market cap of 100 x $1 = $100. Now Shaniqua comes along and wishes to buy one of your coupons for $2, because she ain't very smart, but she likes dem chickan. You sell her a coupon. You can now claim the total market cap of your coupons is $200. This is just based on the last trade though, and you're implicitly assuming there are 99 more niggaz out there as stupid as Shaniqua. Now Chad comes along, and offers you $0.90 for a coupon. You sell him one, and instantly the total market cap of the coupons drops to $90. Are you seeing the light yet?

[Anonymous No.7701440]

>>7701370
screen capped for keks

[Anonymous No.7701465]

>>7701370
this should be stickiedt srsly, any MODS out there willing to sticky this?

[Anonymous No.7701484]

>>7701370
Very well explained, thanks, just bought 100k kfc coupons.

[Anonymous No.7701520]

Market cap doesn't really matter, it's just affected by two variables that matter, price and supply. Supply is what really affects your chances at getting rich off a coin, market cap just changes due to it.

[Anonymous No.7701522]

>>7701370
You could have just said price x supply

[Anonymous No.7701541]

>>7700692
>>7700732
>>7700772
This is the first step. The next is to understand that market cap like >>7700786 is saying.

Here is a good thread to to understand why marketcaps can also be very deceptive:

https://archived.moe/biz/thread/7228543

>The marketcap of the entire crypto market is a complete and total lie and I'll explain to you why. First let's begin with why the marketcap of bitcoin itself is completely inaccurate, and just as a reminder, marketcap is a simple calculation of circulating supply multiplied by the spot price. Here's why that's total bullshit:

>Firstly, you can remove 1 million BTC from the circulating supply right off the top, which is the Satoshi wallet which can never be touched or it will crash the entire market just on the news that it's active. Then, there is an indeterminate number that is very likely very large of coins that were mined very early on in very large numbers and lost forever in wallets that will never be recovered. There are likely at least a couple of million BTC in dead wallets mined by people in the CPU and early GPU days as a novelty that they forgot about or lost for whatever reason. We can probably safely assume that at least 3 million and perhaps upward of 5 to 6 million BTC are lost and irrecoverable for whatever reason. Now again, marketcap is calculated by circulating supply multiplied by the spotprice.

...

>Thus, at the very least, 70%-80% of the alt market DOES NOT represent an actual influx of fiat into the market, but a mere artificial doubling of the fiat price of the fiat onramps used to purchase those coins. Meaning, when you buy BTC to buy an alt, fiat value goes into the market raising the "market cap" of BTC, but when you purchase your alt with BTC, the marketcap of BTC doesn't go down to represent a transference of fiat value to that alt, it merely pumps the "market cap" of that alt, artificially doubling the "market cap" of the entire crypto market.

[Anonymous No.7701548]

Go back to the drawing board you fucking dumbass. And by that I mean reddit

[Anonymous No.7701566]

How is circulating supply calculated? I always assumed it's just the buy/sell data from exchanges which includes wash trades, scalping etc. Not a very reliable indicator.

[Anonymous No.7701605]

>>7701566
Remember that blockchains are visible to everyone? You can programatically parse how much supply is in circulation - nothing extra needed. Exchanges are not a factor at all.

[Anonymous No.7701618]

>>7701605
Thought about that too, but does coinmarketcap.com really analyze the blockchain?

[Anonymous No.7701720]

>>7701618
It differs per blockchain project. I've never calculated it myself, but per block that get's added, doesn't a fixed amount of Ethereum/BTC get released to the miners as their compensation? So then it just is blocks mulitplied by 50BTC or what have you. Some ERC20 tokens are completely different altogether though. You can just call the function totalSupply() on whichever ERC20 token you want to know the supply from, and then just subtract whichever amount is allocated in reserves for development purposes. This is often public information per ICO specifications.

[Anonymous No.7701860]

>>7701720
Sure, but most coins still aren't based on Ethereum. I always thought that a detailed blockchain analysis would provide an incredible detail of accuracy, but then it came to my mind that Coinmarketcap would have to download and store the blockchain for every possible shitcoin in existence, which is of course not feasible.

The way I see it right now, they use predetermined values for Total Supply and Max Supply, and pull the the data for Circulating Supply from order books. But I still haven't found a confirmation for this because their site is incredibly vague.

[Anonymous No.7702082]

>>7701720
>>7701860
It just came to my mind that Coinmarketcap may be pulling data from public blockchain explorers. It would make sense then. So, pulling data from exchanges for prices/volume and from blockchain explorers for circulating supply.

[Anonymous No.7702800]

>>7700692
investopedia.com