Would I be right in thinking that the marketcap (used in the context of cryptocurrencies) is a bit of a fiction? For the majority of coins, there simply isn't the liquidity at the current price?
That's both ways. Try to buy 1 million BTC and you see what happens
I guess to that extent I'd include Bitcoin in the fiction.
Seems strange to speak of 'market cap' on currencies... how many US dollars or pound sterling would I need to buy to affect it's 'value' so dramatically?
Take a coin I like the look of, Boolberry (BBR):
- As of right now, it would really only take 1 order of less than 40BTC on 1 exchange to double its 'market cap' (from 622BTC to 1244BTC, using current supply).
- I don't imagine it would take much more than 20BTC to hold it at that price (or more) for a good few weeks, possibly many months.
- If you place a weighting on market cap, that's a mere 60BTC to add 600BTC of perceived 'worth' to a fledging currency and send it scurrying up the cryto 'charts'... (obviously if I were skilled in the arts of pumping, I could probably increase the market cap by more with less spend).
- This wouldn't say much about the increase in 'value' of the coin, in the court of public opinion. It only says I like the enough to back it to the tune of 60BTC.
- If I owned (which I don't) 10,000 BTC, this would be a mere 0.6% of my holding.
As a (newbie) investor in the 'future of money', not sure I'd put much stock (if any) on 'market cap' (current supply or total supply), not least because it appears very susceptible to manipulation.