I have heard many people making comments on several coins like XRP, XLM, ADA; that they have so many coins in circulation, so prices will never surge.... and since there are so many coins, prices will eventually fall....
WRONG!
I have been trying to repeatedly explain each and every person why that should not matter, and some people dont want to even apply basic mathematics to analyse a coin. Clear the misconceptions and learn to analyse everything logically as well....
It is just an illusion....
Lets analyse it in the more logical and correct way....
Lets take two examples to clear the misconceptions...
Lets first take the example of an imaginary coin ABC.
ABC has 100 Billion coins.
So total market cap= $100 billion.
So each coin is valued at $1.
Lets say you invest $10000 so you get 10000 coins.
Now the market cap is rising...
Let's say, due to demand, market cap reaches $150 billion.
Technically speaking, each coin will be just around $1.5.
But look at your overall investment... If you sell all 10000 coins at $1.5, you finally get $15000.
So net profit= $5000.
Lets pause here and look at example 2 now....
Let's imagine there is another coin XYZ having a circulation of 100 million.
I kept market cap of both coins, as well as the increment same to avoid confusion...
So total market cap=$100 billion...
Now value of each coin= $1000.
Pretty large value right?
Lets say you again invested the same amount, $10,000.
So you have 10 coins.....
Now you see market cap is rising due to demand of the coin.
Lets say market cap reaches $150 billion....
So each coin will have a value of $1500.
Thats a $500 increase per coin as opposed to just $0.5 per coin in the first example.
So if you sell 10 coins you will get $15,000 on your investment.
Now this thing creates an illusion that $0.5 increase is nothing at all as compared with the $500 rise.
See that you have invested the same amount, both the coins have same market cap, both the coins have same potential.... So did the high number of coins affected the final returns?
Let me know in the comments below.....
I now hope seriously that people shouldnt make comments like more coins mean less value....
Dont just look at the individual coin value, look at what your investment is, and what your potential return could be....
And its always better to make a judgement on the rise and fall of the overall market cap instead.
Comment, upvote, resteem to spread awareness.....
And join t.me/st33m to have a meaningful discussion and share your articles and get upvotes from the community....
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Interesting Insight !
Nice one !
👌
Nice
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