I've posted about this before because people often get this wrong. This is for my newer followers. One of the biggest mistakes I see in crypto is treating market cap like it predicts how high an asset can go. It doesn’t. Market cap is simply an estimate of current value: Current price × circulating supply = market cap. It is not the amount of money invested in the asset, and it is not a ceiling on future price. What ultimately determines price is supply and demand. If available supply becomes scarce while demand increases, buyers have to bid progressively higher to find sellers. That higher marginal price is then applied across the circulating supply when market cap is calculated. This is why saying, “That coin could never reach that price because its market cap would be too high,” can be misleading. Market cap is the result of price, not the force setting the price. If demand becomes large enough relative to available supply, price can move far beyond what people previously thought was possible, and the market cap simply adjusts upward with it. Stop treating market cap as a prediction tool. Watch supply, available liquidity, and demand. That is where price discovery actually happens. #Crypto #Bitcoin #Altcoins #SupplyAndDemand
Eric Van Tassel (Not a Financial Advisor!)Share
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