Why Market Cap is a Meaningless & Dangerous Valuation Metric in Crypto Markets

Despite its foolishness there for all to see, market cap is blindly used by the masses and even experienced investors who should know better.

Anthony Back
Dec 17, 2018 · 8 min read

How is market cap calculated for cryptocurrencies and tokens?

Coinmarketcap.com

Market cap doesn’t = value

Market cap only reflects the last transaction price

Circulating supply is over accounted for

“the best approximation of the number of coins that are circulating in the market and in the general public’s hands.”

Market cap doesn’t represent real money invested

“Market cap created the perfect tool to attract newbies by artificially inflating the numbers. They mine 1 million coins they release a thousand in reality which they can buy for 10$ a piece. And suddenly that crapcoin has a 10 million market cap and noobs flock. And in one week time, most of them get fleeced.” — Unknown

Market cap is a useless comparison tool

Market cap? More like market crap



The Blockchain Review by Intrepid

A Blockchain Technology Business Journal by Intrepid

Anthony Back

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Interested in technology. Think about the future a lot.

The Blockchain Review by Intrepid

A Blockchain Technology Business Journal by Intrepid