Market Cap in crypto isn't so accurate, just letting you know.
Market Cap in cryto doesn't reflect the REAL FIAT money coming in, most people don't know this FACT.
Market Cap can be manipulated by the same cryptos over & over again with the same FIAT money !!! YES that's so true & people still don't know this.
The real Market Cap of crypto is so ambiguous so far even though we're crypto is 9 years old now.
The real Market Cap will come once the real monetary institutions comes in & we know how much Real fiat got in & out, that's the only real market cap.
Your detailed explanation can be described in one word: bubble.
But there is nothing wrong with that.
Once in the Netherlands one tulip bulb cost a lot of money, then it collapsed, and as a result commodity exchanges appeared.
The crypto is still at the beginning. Inflated capitalization is only one of the problems of progress.
In any case, it is big investments in cryptocurrency that will be able to return the market to the previous level, which means that in any case, only an increase in capitalization can change the situation for the better.