Stop repeating your wrong definition of “marketcap”
1 min read
This misconception is repeated in the crypto subs almost daily.
Market cap DOES NOT equal total money invested.
Marketcap = (# of coins in circulation) x ($ price per coin)
Price is whatever someone is willing to pay. Therefore marketcap is an imaginary number. Its not a real number of how many dollars are invested into a coin. It can be $1 or a quadrillion. Stop using this metric to justify things to yourself about a coin you like or dont like.
Example:
You have a tree, it can only make 100 apples. Someone buys 1 apple from you for $1 and just like that suddenly the marketcap of all apples your tree made is $100. Did someone give you this $100? No. Marketcap is an imaginary metric, not the number of dollars someone handed you.
submitted by /u/bitcoin_islander
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