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RE: Why doubling the number of bitcoin users would more than double the price.

in #bitcoin7 years ago

I thought I understood your example, but then I probably over thinking it. Isn't the price of a cryptocurrency just MC/# of coins? Why wouldn't the marketcap be 20k in example #2? Regardless, BTC is a strong HODL.

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Marketcap has no relation to the amount of money people invested. It is numberofcoins X lastpricepaid.

OK so MC does not represent how much money everyone has put into it?

As a simple example, if someone paid 20k for BTC today then MC would become 20k multiplied by numberofcoins. If so, then I think I had it backwards where price is determined by MC.