Does market cap important in choosing your coin?
Does market cap important in choosing your coin?

By piggiemay | Earn Extra Online | 21 Mar 2020


Actually I am a simple minded person with regards to cryptocurrencies. I don't do trading and other similar options. I only had few coins in may wallet invested in celsius network, my trusted investment app.

I don't have some serious reason to consider on choosing my coins. Popularity and price are my consideration. Yesterday I've read a comment on one article here in publish suggesting that one should invest in coins with low market cap to gain more. So should you consider it? Does market cap really matter in choosing your coin?

I believe that the value of coins fluctuate depending on the moods of the investors. Imagine a bitcoin which has a current market cap as of writing amounting to 5.5 trillion pesos. If a huge number of investors decided to invest in bitcoin then its value will/probably rise (law of demand and supply)and other investors will also benefited. If more investors decided to sell then it will definitely a loss for bitcoin.

Comparing to today's market (stock market), it is relatively down. Philippine stocks already loss 1.16 trillion pesos due to corona virus scare, that is 41% year-to-date value. This is the effect of investors pulling out their stocks. Meanwhile, the remittance and fund transfer increases. People needed more fiat money to buy goods because of lockdown. I think the same reasoning goes to crypto currencies.

Yesterday I posted an article about XLM comparing them to other big coins in the market. Currently the price of XLM is only 1.96 pesos with market cap of around 39.7 billion pesos as of writing so let's make it as an example. If ever moody investors decided to invest in XLM then it's price will/possibly rise. Other investors will definitely benefited to its rise in price value. Vice versa, if more investors feel like selling their XLM then its price will goes down.

So what I want to pinpoint here is investing in lower market cap cryptocurrencies doesn't guarantee success. It doesn't mean that you will earn more. It's more of investors mood for me.

I've come to this blog explaining why market cap is meaningless: https://medium.com/blockchain-review/why-market-cap-is-a-meaningless-dangerous-valuation-metric-in-crypto-markets-8deb78c50995

Lastly, this are my personal opinion only. Comments are welcome but please no to harsh words. I am not a professional trader nor expert in investments and this is not a financial advise.


piggiemay
piggiemay

Crypto beginner. Trying hard blogger. Art appreciative. Food lover. Mobile photography neophyte.


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