Positive wealth effect = increase in marketcap : net virgin demand
In CKG case, there was $50k new money wanting in, which ended up raising the marketcap to $500k, making the wealth effect coefficient of 10x.
I see what you mean. It's a function of the strength of the holders' hands. The stronger the hands, the greater the wealth effect. As your excellent analysis of dishoarding shows, there's an incentive to hold for the first few doublings (whatever starts to be life-changing), then sell at a certain rate
I have to disagree with rpietila. The whales can't sell until the masses come in. There isn't typically enough liquidity until then. The market can sniff their moves out because they are simply too large. Only the masses are too stupid not to sniff it. The wealth effect is illusionary until the float is filled with those buy high and sell low. Or until you've converted the SoV into a UoA by bringing the masses sufficiently into it in small enough morsels (checking account not brokerage account balances) that they don't need to stampede sell.