Understanding marketcap and meaning.

[Bobcrypto]

Sometimes people get it wrong in understanding the exact correlation between the market cap, supply, and price.
Now. some people think that marketcap in crypto is the amount of money invested in that particular coin.
For instance, if Coin A’s market cap is 1 million dollars, it is understood that it is the amount invested in it. Unfortunately, this is wrong.
For example, if bitcoin reached $220 billion in market cap, 220 billion dollars were invested in it?
This is not correct.
When market cap increases, the price of every coin increases and one needs to understand there is no new money coming in for the coins that are sitting in yours or anyone else’ pocket.
Let share, what can "marketcap" be from this idea? Everyone's contributions is needed for more lesson. Thanks

[masterrex]

Sometimes people get it wrong in understanding the exact correlation between the market cap, supply, and price.
Now. some people think that marketcap in crypto is the amount of money invested in that particular coin.
For instance, if Coin A’s market cap is 1 million dollars, it is understood that it is the amount invested in it. Unfortunately, this is wrong.
For example, if bitcoin reached $220 billion in market cap, 220 billion dollars were invested in it?
This is not correct.
When market cap increases, the price of every coin increases and one needs to understand there is no new money coming in for the coins that are sitting in yours or anyone else’ pocket.
Let share, what can "marketcap" be from this idea? Everyone's contributions is needed for more lesson. Thanks

In some points Market Capitalization for any particular coin/token was base on last traded price(deluted Market Cap) computed out of its total circulation or supply(*multiplied by the last traded price) thats how i know and its the money that invested by people but just the total estimates base on the Market price of a particular Coin/Token.

[Zed0X]

Sometimes people get it wrong in understanding the exact correlation between the market cap, supply, and price.
Now. some people think that marketcap in crypto is the amount of money invested in that particular coin.
For instance, if Coin A’s market cap is 1 million dollars, it is understood that it is the amount invested in it. Unfortunately, this is wrong.
For example, if bitcoin reached $220 billion in market cap, 220 billion dollars were invested in it?
This is not correct.

If that was incorrect, care to share to us what is the exact or correct correlation among supply, price, and market cap? I did not see an explanation in your entire post.

When market cap increases, the price of every coin increases and one needs to understand there is no new money coming in for the coins that are sitting in yours or anyone else’ pocket.

Come again? I have not seen an instance where the overall market cap increased and the price of every coin increased also. Can you point to us when did that happen?

@bobcrypto I hope you reply to your topics. If you ask for our contributions, then it would be fair if you could also respond to our questions. Don't just post and ignore. Let's have a discussion shall we?

[Nestle]

Market cap is the total of the supply of coin X value of the coin.  example: the current price of bitcoin is $ 8,539 x ​​17.98 M = Total Market Cap 153,531,220,000 / 153.53B

[asrafmasyur]

if bitcoin reached $220 billion in market cap, 220 billion dollars were invested in it?

I do not understand the meaning of your post, but the answer from @Nestle can answer your discussion. A simple example for marketcaps, I think that's not the total amount invested in it. but the amount of Marketcap is the total value of the coin depending on the price. EX: You have 1 piece of gold at a price of 10,000 usd, then your total Marketcap (wealth) is 10,000 usd. 

Market cap is the total of the supply of coin X value of the coin.  example: the current price of bitcoin is $ 8,539 x ​​17.98 M = Total Market Cap 153,531,220,000 / 153.53B

[Bobcrypto]

Sometimes people get it wrong in understanding the exact correlation between the market cap, supply, and price.
Now. some people think that marketcap in crypto is the amount of money invested in that particular coin.
For instance, if Coin A’s market cap is 1 million dollars, it is understood that it is the amount invested in it. Unfortunately, this is wrong.
For example, if bitcoin reached $220 billion in market cap, 220 billion dollars were invested in it?
This is not correct.

If that was incorrect, care to share to us what is the exact or correct correlation among supply, price, and market cap? I did not see an explanation in your entire post.

When market cap increases, the price of every coin increases and one needs to understand there is no new money coming in for the coins that are sitting in yours or anyone else’ pocket.

Come again? I have not seen an instance where the overall market cap increased and the price of every coin increased also. Can you point to us when did that happen?

@bobcrypto I hope you reply to your topics. If you ask for our contributions, then it would be fair if you could also respond to our questions. Don't just post and ignore. Let's have a discussion shall we?

Yeah, in response to your ideas, it obvious that when prices rise, it is due to buying and selling activities and this will definitely increases liquidity and thus enhances the marketcap ( remember that, marketcap = coin price × circulating supply and also price = marketcap/circulating coin supply) at certain period of time.
Now, what is liquidity of a coin? If you check your CMC, you may notice that marketcap drop as prices drop too. I put to you that the overall marketcap increases as price increases. Vice visa

[Bobcrypto]

if bitcoin reached $220 billion in market cap, 220 billion dollars were invested in it?

I do not understand the meaning of your post, but the answer from @Nestle can answer your discussion. A simple example for marketcaps, I think that's not the total amount invested in it. but the amount of Marketcap is the total value of the coin depending on the price. EX: You have 1 piece of gold at a price of 10,000 usd, then your total Marketcap (wealth) is 10,000 usd. 

Market cap is the total of the supply of coin X value of the coin.  example: the current price of bitcoin is $ 8,539 x ​​17.98 M = Total Market Cap 153,531,220,000 / 153.53B

You have to go through my post very well to understand my points. I will respond to your post with regard to coin values and marketcap. Marketcap = coin price × circulating supply, and
Prices =marketcap/circulating coin supply. Please read your post and your formula again. Compare with my formula.

[Zed0X]

Yeah, in response to your ideas, it obvious that when prices rise, it is due to buying and selling activities and this will definitely increases liquidity and thus enhances the marketcap ( remember that, marketcap = coin price × circulating supply and also price = marketcap/circulating coin supply) at certain period of time.
Now, what is liquidity of a coin? If you check your CMC, you may notice that marketcap drop as prices drop too. I put to you that the overall marketcap increases as price increases. Vice visa

So are you changing the "When market cap increases, the price of every coin increases to something like "market cap increases as a result of increase in overall prices of coins"? If yes, then I can accept that statement.

This is why it is important to challenge or question statements in the original post. You may have had lapses there because it was clear to me that increase in every coin is not accurate.

[Bobcrypto]

Yeah, in response to your ideas, it obvious that when prices rise, it is due to buying and selling activities and this will definitely increases liquidity and thus enhances the marketcap ( remember that, marketcap = coin price × circulating supply and also price = marketcap/circulating coin supply) at certain period of time.
Now, what is liquidity of a coin? If you check your CMC, you may notice that marketcap drop as prices drop too. I put to you that the overall marketcap increases as price increases. Vice visa

So are you changing the "When market cap increases, the price of every coin increases to something like "market cap increases as a result of increase in overall prices of coins"? If yes, then I can accept that statement.

This is why it is important to challenge or question statements in the original post. You may have had lapses there because it was clear to me that increase in every coin is not accurate.

My friend, if you are good in Economics just like i do, you may understand this principles of crypto market capitalization. Marketcap in crypto is a little differ from stock or other market equity or investments.
A general consensus or definition of market cap in crypto is that it is the amount of money invested in that particular coin.
For example, if Coin A’s market cap is 1 million dollars, it is understood that it is the amount invested in it.
I think this is where people base their ideas, but i think otherwise, for example , do you think when Bitcoin reached $200 billion in market cap, 200 billion dollars were invested in it?  This is not.
When market cap increases, the price of every coin increases and one needs to understand that there are no new money coming in for the coins that you have or anyone else’ has.
In a nutshell, this formula may be applied. Marketcap = coin price × circulating coin supply, and Coin price = marketcap/circulating coin supply.  This is where liquidity/coin volume comes in. Remember that coin volume is an indicator of liquidity.

[ZionRTZ]

When market cap increases, the price of every coin increases and one needs to understand that there are no new money coming in for the coins that you have or anyone else’ has.

I was reading the whole thread and even I got confused. I think what you mean here is that when market cap of a particular coin increases, it means the price of that specific coin also increased.

When the overall marketcap of crypto increases, it does not necessarily mean that prices of all or every coin increases.

Don't pull any more formula because almost everyone in this thread is familiar on how to arrive at coinmarketcap.

[Zed0X]

My friend, if you are good in Economics just like i do, you may understand this principles of crypto market capitalization. Marketcap in crypto is a little differ from stock or other market equity or investments.
A general consensus or definition of market cap in crypto is that it is the amount of money invested in that particular coin.
For example, if Coin A’s market cap is 1 million dollars, it is understood that it is the amount invested in it.
I think this is where people base their ideas, but i think otherwise, for example , do you think when Bitcoin reached $200 billion in market cap, 200 billion dollars were invested in it?  This is not.
When market cap increases, the price of every coin increases and one needs to understand that there are no new money coming in for the coins that you have or anyone else’ has.
In a nutshell, this formula may be applied. Marketcap = coin price × circulating coin supply, and Coin price = marketcap/circulating coin supply.  This is where liquidity/coin volume comes in. Remember that coin volume is an indicator of liquidity.

Mate, most average investors knows that formula already and it doesn't take someone to be good with economics to figure that out.

In case you haven't noticed what I'm trying to point out yet, I'm having an issue with your "When market cap increases, the price of every coin increases" statement. Read zion03's reply, it is similar to what I am trying to say.

If I am to rephrase that, I would have preferred this line "When the marketcap of a particular coin increases, it means its price also increased" (assuming there is no decrease in circulating supply). 

 

[Bobcrypto]

My friend, if you are good in Economics just like i do, you may understand this principles of crypto market capitalization. Marketcap in crypto is a little differ from stock or other market equity or investments.
A general consensus or definition of market cap in crypto is that it is the amount of money invested in that particular coin.
For example, if Coin A’s market cap is 1 million dollars, it is understood that it is the amount invested in it.
I think this is where people base their ideas, but i think otherwise, for example , do you think when Bitcoin reached $200 billion in market cap, 200 billion dollars were invested in it?  This is not.
When market cap increases, the price of every coin increases and one needs to understand that there are no new money coming in for the coins that you have or anyone else’ has.
In a nutshell, this formula may be applied. Marketcap = coin price × circulating coin supply, and Coin price = marketcap/circulating coin supply.  This is where liquidity/coin volume comes in. Remember that coin volume is an indicator of liquidity.

Mate, most average investors knows that formula already and it doesn't take someone to be good with economics to figure that out.

In case you haven't noticed what I'm trying to point out yet, I'm having an issue with your "When market cap increases, the price of every coin increases" statement. Read zion03's reply, it is similar to what I am trying to say.

If I am to rephrase that, I would have preferred this line "When the marketcap of a particular coin increases, it means its price also increased" (assuming there is no decrease in circulating supply).

This is not applicable to every coin in the market, the increase or decrease is basically few numbers of coin(s) that actually increases at certain period of time. Evey does not pump at the same time, but certain time it almost look like if bitcoin pump, it drives every other coins in the market.

[Zed0X]

This is not applicable to every coin in the market, the increase or decrease is basically few numbers of coin(s) that actually increases at certain period of time. Evey does not pump at the same time, but certain time it almost look like if bitcoin pump, it drives every other coins in the market.

Ayt! We can both agree on that.

[Abusadeeq6]

market cap is different from market volume. market volume is the total amount traded within that period. while market cap is the total amount circulating multiply by the actual price at that time. market cap determines the total assets stipulated by a price