I’m seeing so many people just not have any understanding of one of the most basic measurements of valuation. If you don’t know what “market cap” means and you’re trying to get in early on “moonshots,” I’m begging you to take 2 minutes to read.
Market capitalization is the total value of all members of an asset. Just circulating supply * price.
What does it tell us? It lets us know how much money is in it, and how it compares to other coins.
Take SHIB for an example. It has a circulating supply of 400 trillion tokens, so at its price of 0.003¢, it has a market cap of nearly $12 BILLION. That’s 1/5 of doge’s cap of $60B, and it is therefore already one of the largest cryptocurrencies out there.
At 10¢, the market cap would be $40 trillion, double the US annual GDP. It will not hit 10¢. It will not hit 1¢z It will not hit 0.1¢. It MIGHT hit 0.01¢ because of how the market has been working lately, but those other targets are just mathematically far too high.
The creators want you to see all those zeros in front of the price and assume buying it would be “getting in early.” Don’t let them fool you. You are not getting in early by buying a coin with a $12B market cap. You are almost certainly very very very late.
DYOR. Please.
Edit:
A lot of people are hung up on “how much money is in it.” I didn’t mean it in terms of principal investment, I meant it in terms of valuation. I have a lot of BAT that I bought at 30 cents. I don’t value it as if it were the 30 cents per token that I bought it at, because I know I can just sell at the market price if I need to.
The argument that it would crash if everyone tired to sell at once is fallacious. It’s valued at what it is and it ISN’T crashing to nothing from everyone selling at once because people aren’t trying to all sell at once. They would rather have the BAT than the $1.30. If they didn’t, they would have sold already.
submitted by /u/nascraytia
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