Serious question... how does ${Price of 1 coin} * ${Total supply of coins} = ${Market cap}? Not all coins are going to sell for the peak price ... it seems like a moot metric at best.
This is exactly the same whether the assets are commodities, cryptocurrency or equity yet we still talk about market cap as a useful proxy.
I can't think of a non-currency asset that shares this property. For currencies, measuring the size of the monetary base can be meaningful. But it's not as meaningful as market capitalization is to individual equity securities.
Epistemologically, we cannot choose good summary metrics for Bitcoin until we know what it's useful for.
[1] https://www.sec.gov/Archives/edgar/data/320193/0000320193170...
Say he owns them all and then starts an auction for one share every day. Could you still take the price of that one share per day to determine a total value of the company?
That is not in opposition of your argument. (Crypto)currencies are vastly different to stock in an established and profitable company. But also f.e. Uber stock is very different from Apple stock.
Minority discount models [1] are notoriously useless or hairy, owing to the complexity of the body of law governing what a controlling shareholder can and cannot do to minority shareholders (and how likely they are to get away with it). The inverse of those models is the control premium [2], the amount an acquirer is typically wiling to pay over the public stock price to buy every last share.
We could quibble about whether the $900 billion company is worth $1 trillion or $800 billion after being taken over (with or without stubs [3]). What we will probably agree on is it is worth more than zero. That's all that is germane to my original argument.
[1] https://www.divestopedia.com/definition/991/minority-discoun...
With Apple, the price reflects future income potential. Thus, if holders of Apple shares sell 10% of the outstanding stock, that should not affect the price much, in theory, except to the extent that it reveals new information about the firm. Sure, the price will drop, but if it drops much, investors will come in and pick up the cheap shares.
With BTC, the value comes solely from the value people assign to it (unlike Apple!), and when people sell it, that is ipso facto evidence that it's less valuable (unlike Apple). Thus, if holders of BTC sell 10% of the outstanding coins, there's really not much to support the price (except maybe painting the tape and freshly printed tethers), and it could conceivably collapse completely.
> I can't think of a non-currency asset that shares this property.
Good point. I was thinking of gold, but surely if someone purchases all the world's gold, it'll be worth quite a lot, because it does have intrinsic uses. With BTC, people could trivially switch to any fork.
(If you want to observe that value is thus still relative and that the people making the offer are themselves influenced by the market cap, go nuts. However, if you intend "valuations are relative anyhow" as a selective attack on the realness of stock market caps but then "accidentally" forget to apply the same logic to cryptocurrency market caps, I'll pass.)
That's like selling your car vs selling your car with 10.000 dollars in the trunk. Obviously it affects what I'm willing to pay.
But the important question is still the worth of the car - which is very complicated to determine objectively and with f.e. classic cars nearly pure speculation.
If everyone decides to sell, price will go down, but we can also make the opposite argument. If I were to buy all coins in the world, I would probably have to pay much more due to the increased demand.
and i think it's not as meaningful a metric as it would be with stocks since its a much more volatile asset class
Oh, bitcoin users will be very disappointed that they do not own the solar system after all.