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/biz/ - Business & Finance

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18903371 No.18903371 [Reply] [Original]

Explain how marketcap is a meme

>> No.18903503

>>18903371
It’s not

>> No.18903574

It doesn't take into account 1) the differences between liquid and circulating supply, or 2) any of the buying incentives.

1) In a PoS system or a system like Chainlink where there are incentives to "lock" tokens by collateralising them, the number of tokens available for sale may be way smaller than the total number of tokens in circulation.
2) Buyer incentives may be completely unrelated to whatever figure "market cap" shits out. If I am a Chainlink node operator who wants $10k more collateral to supply contracts I'm servicing, and at that time $10k is 10 LINK, my purchasing decision is not affected by "Oh one trillion is a big number and that's the market cap". Market cap has literally zero relevance. As that node operator I simply say "I need $10k more collateral and currently that is 10 LINK, so that is what I'll pay".

>> No.18903619

>create an ERC20 token with a 100 billion suppy
>trade 0.001 token to myself for $100
Congrats, I've just flipped the market cap of BTC.

>> No.18903760

it doesn't matter
eth had 1 billion mc at 10$ in 2016

>> No.18903796

>>18903574
LINK is a security and therefore limited by marketcap like stocks are. Unlike XRP and other non security cryptos which are commodities or currencies.