Bitcoin market caps

Total Capitalization of the Crypto Markets Now Exceeds $750 Billion

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Recently, more and more people are using the term market cap as an argument against the rise in the XRP price.

Is it a correct argument from those who use it? We will see the answer in this article, and at the end you will form an opinion. This article was written especially for those who have a little experience in the Crypto market and use the market cap.

Market cap, or capitalization is the market value of all currencies. It is calculated by multiplying the number of coins with the current currency price. Generally, in the Crypto marketthe formula of the market cap is used to bitcoin market caps seen reaching the target price by bitcoin market caps with BTC or other foreign companies, if possible in the future. In this formula, we will introduce the target price at which we think the currency could be instead of the current price.

In this way, we will have a market cap. The market cap that will result from the calculation will be compared to the Bitcoin market capor other companies listed on the Stock Market. Thereby, we can realize whether our price target is realistic or not. This result came from: Why do we have this very big difference in the market cap XRP?

In conclusion, many refer to a large XRP bitcoin market caps capbecause they do the calculation bitcoin market caps the 99 billion formula.

In fact, the circulating currency is about 38 billion. What would be the correct calculation? I do not know exactly, but in order to have some equal reference data, we will use the formula on coinmarketcap. I would like to note that the formula of the market cap contains a variable element: It is also noteworthy that the total market cap of the Crypto market is steadily increasing.

Crypto market is a growing young market and will attract more and more money from other capital markets, especially from the Stock Market. The total market cap of these digital assets rose to as much as Currently, there are more than 60 hedge funds that focus on these currencies, according to data provided by the Fintech analytics firm Autonomous NEXT and reported by Business Insider.

Now as we have clarified that we have a variable element in bitcoin market caps market cap formulais it wrong to assume that at some point in the future XRP market cap will be as big as the BTC market cap? I do not think it is exaggerated at all, considering that the Bitcoin market caps market cap will be much higher in the future than the current market cap.

Perhaps some of those who read this article believe these figures are utopian. We can say that these figures are, at the moment, pure speculation. However, if Ripple gives us the news so soon, these calculations can become reality.

We have to be very objective and realistic when we use market cap. Bitcoin market caps should have a huge market cap. Using this type of limiting, market-based thinking, many people sold BTC and were satisfied with a small profit. Bitcoin market caps a number of years, they realized they had made the biggest mistake of their lives. Let me tell you a secret. It is known that a low priced and low cap bitcoin market caps will yield a much better annual return than the top-ranked companies that are expensive bitcoin market caps market-leading.

On the stock market, some investors are looking for low priced equity companies. If they are good and fundamentally, they will buy those shares.

It is known that a low-priced and small-market share will yield a much better annual return than the top-ranked companies with a high market share. Does XRP have the necessary skills to be bought by a lot of investors on the stock exchange who would like to get better randame?

Undoubtedly, the answer is affirmative. Now I would propose you an exercise of imagination. I have a top market ranking of the top 10 companies in the world. It should be remembered that the two coins have huge bitcoin market caps to attract money. Maybe none of them will reach the top 10 places. I think they have all the chances to get into the top bitcoin market caps market cap in the future. How many years will the two coins need to get in this top?

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This article explains why this argument is utter nonsense. The flawed reasoning is as follows: This terminology is borrowed from equities, where the market cap of a company is the price per share x number of shares outstanding. So, you divide by the number of bitcoins But this argument is wrong.

The marketplace for financial assets including bitcoin can be described by an order book: Traders use order books for price discovery and for executing trades — you can see the cheapest price someone is willing to sell bitcoins for, and the highest price someone is willing to pay for bitcoins. The order book currently looks blank, like this:.

Well, since there are no prices and no bitcoins have changed hands, the market cap is undefined at the moment. Now, say, you want to buy a bitcoin from one of your friends. The order book now looks like this:. If they want to sell more than 1 BTC, then they are out of luck: These are wildly different numbers! But as the order books fill up ie more liquidity is available , the best bids and best offers start to converge. Also, no trades have happened yet at all, and you and your friends are just suggesting prices you are willing to trade at.

We can continue to build up this order book, and the best bid price and best offer price will converge. Here is the order book a few minutes later:.

And the market cap of bitcoin could be described as any of:. Note that these are different to the previous market caps when the order book was emptier. So the market cap s can change even without any trades taking place. The gold argument says that money could flow out of gold and pumped into bitcoin, increasing its market cap, and therefore increasing the target value of a bitcoin.

So now we have an actual traded price! And the market cap of bitcoin could be best described using the last actual traded price instead of theoretical prices:. How much money do they need to spend? And how does the order book look after this trade is executed? According to the gold argument, what would the expected price of a bitcoin be?

Market prices and therefore market cap can also change without any trades taking place. She cancels the order. These market cap numbers are very different to the numbers before those two orders were submitted. All of the market caps except last have changed… without any trading taking place at all! So the market cap can change without any trades taking place. This happens in practice.

This means that the bid, offer, mid market caps can change significantly without any trades. So the market cap is derived from the market prices bid, mid, offer, last , and the market prices can change without any trades happening. And even a very small trade at a new price can alter the market cap last. Having said that… yes of course, if there are more buyers with a greater desire to buy and pay whatever it takes to accumulate BTC, then the prices bid, mid, offer, last should increase.

A great article and not something most people involved in Bitcoin understand. It is important to learn that, as otherwise the HFTs and Prop Traders will have full control of the market. How about valuing bitcoin this way. Equate the total number of bitcoins 21 million to the federal reserve monetary base 3.

You can equate the total number of bitcoins to anything stars in the galaxy, grains of sand on the beach and come up with ridiculous numbers. How do you justify equating them to the federal reserve monetary base?

I have read all your articles, fantastic reading to get a thorough understanding from soup to nuts! You are commenting using your WordPress. You are commenting using your Twitter account. You are commenting using your Facebook account.

Notify me of new comments via email. Order books The marketplace for financial assets including bitcoin can be described by an order book: The order book currently looks blank, like this: The order book now looks like this: What is the price of Bitcoin? So a market cap of bitcoin, based on the bid price is: So the market cap of bitcoin could be described as any of: And now the market cap of bitcoin could be described as: Here is the order book a few minutes later: And the market cap of bitcoin could be described as any of: Pumping money into bitcoin The gold argument says that money could flow out of gold and pumped into bitcoin, increasing its market cap, and therefore increasing the target value of a bitcoin.

And the market cap of bitcoin could be best described using the last actual traded price instead of theoretical prices: Total cost to buy 14 BTC: Prices can also change without trades taking place Market prices and therefore market cap can also change without any trades taking place.

So how does the order book look after your trade? Conclusion So the market cap is derived from the market prices bid, mid, offer, last , and the market prices can change without any trades happening.

I appreciate your simple way of explaining complicated matters. Keep up the good work! No money coming or going argument. It puts things in perspective. Thank you for your comments though. Leave a Reply Cancel reply Enter your comment here Fill in your details below or click an icon to log in: Email required Address never made public.

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