
Ask HN: What is a good way to think about the market cap of a cryptocurrency? - TekMol
Since Bitcoin forked into Bitcoin and Bitcoin Cash, I have been thinking about cryptocurrencies again.<p>Bitcoin Cash has a market cap of about 9 billion meanwhile. That&#x27;s in the same ballpark as for example Porsche.<p>But what does that mean?<p>The market cap of a company is pretty easy to explain. It is the expected sum of all future earnings discounted for inflation.<p>What would be an equivalent way to explain the market cap of a currency?
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eminkel
I'd think you need to take into account a few other items such as:

Network Usage (What business segment is using it?) Upcoming Deliverables (Are
current issues being resolved, active development?) Features Awareness (Is it
in the press? Is press good/bad?)

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nhayfield
It's just the total number of coins times the current price per coin.

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TekMol
Well, that's like saying the market cap of a company is just the number of
shares times the price per share.

But then how would you judge if the price is too high or too low?

I'm pretty sure that currencies have a value in a deeper sense then just "What
people pay for it".

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neboysa
Actually, very often they don't... Porsche shares, if you wish, are the
representation of the public perception of value of their cars, service
network, brand, cash in the bank, etc. They are the quantifiable proxy of
those values. Cryptocurrencies do not proxy anything. So, the only way to
measure their value is by "what people are willing to pay". And that doesn't
have to be bad, a-priroi. Its just different thing. So, the cap of crypto _is_
nr of coins time price per coin, where ppc changes heavilly over time. So the
"market cap" of crypto is not constant - it changes very rapidly over time.
<crypto_name_here> could have a cap in billions today and zero next Thursday.
Hence, there isn't much sense in trying to define/measure it.

