First, why you should even think market capitalization makes any sense?!
Much the same as you can duplicate offers exceptional and by current cost to get a near sense for how the total of an organization's stock is esteemed, so it bodes well that you could increase the supply of a crypto-asset's token by the cost of those tokens to get a general estimation of the system. On the off chance that this heuristic holds, it makes it simple to contrast resources with themselves after some time and to the market of choices at some random minute.
Without a doubt, showcase top has been the most steady and overwhelming measurement in this youthful industry. In the case of attempting to catch the dread and FOMO of a retreat or the fervor of a flood, features definitely plumb for changes in either resource cost or market top.
There are reasons, nonetheless, to be doubtful. For nearly as long as crypto has utilized market top as a measurement, there have been the individuals who have evaluated its utilization and brought up why, best case scenario, it tends to deceive, and best case scenario, it can boost a large group of inefficient, notwithstanding harming practices.
definition: Market cap in any market means the share price multiplied by the total number of existing shares. So in Crypto market it will be price of each coin multiply in its total number of supply in the market.
The history
This is the chart of total crypto market cap since July 2013. when the Bitcoin wasn't on such hype and media. I started knowing about crypto roughly same time and it became one of my biggest regrets why I didn't understand how revolutionary it can become. I just though those days, well, just another nice idea which won't work well in the world of policies and centrelized power and economy lobbies. well, I was wrong 95%.
So bitcoin became precious and crypto became the most lovable thing in couple of years. but let's back to our subject, $1000 Billion crypto market cap, dream or right over there?
I mean, if it's so lovable and seems to be doing fine, why not?
According to the Bank for International Settlements triennial report, the foreign exchange (forex) market cap averaged $5.1 trillion per day. and many were speculating in 2017 that the crypto will be a 2 trillion market in 2018, but it didn't. So what's the problem?
The problem
Look at the above chart, once again. the first problem is, the chart exactly looks like the bitcoin chart in the same period! it is called dominance. Now to talk more about dominance, you may like to look at the below chart:
again it shows the dominance of bitcoin, but it reveals the second problem too!
Whenever BTC rises, altcoins get diluted in the market cap, and when BTC pulls back, we see altcoins getting more gain! The reason seems to me, like the crypto market is not yet an open ecosystem with all the other financial ecosystems. I'm talking about adoption. Still many people haven't had adopted and opt in crypto thing. Many even haven't bought the idea.
So whenever BTC goes hot, people take money out of other coins and start buyng BTC.
Conclusion
Yes the market cap can achieve $1 trillion and more, but it takes more than rising prices of Bitcoin. it needs altcoins to become more usable, so more people adopt the crypto. BTC has a limited number in supply, the holy number of 21 million! and each bitcoin worthing 1 million USD is not going to solve any problem in the world! but real usable altcoins can improve our life, our economy and our expectancy from an economic system.
Otherwise, I don't see the market growing to any more than $500 billion (right now it's $300 B) and worse, I don't see any meaning or positive thing in it, getting to the big T!
The cover art is from lombardiletter.com, full path in the resources section. The charts are from CoinMarketCap.com.
I may republish this article or part of it in my twitter, linkedin, steemit etc accounts, where all are in my own name, @honarparvar, and will be refered to this post on publish0x.com as the original copy.
Thanks for reading, I appreciate your comments.
