The market cap of an unregulated asset is frequently in danger of being grossly misrepresented. In traditional terms, the market capitalisation of an asset refers to the total dollar market value of a company and it's outstanding shares of stock.
It is calculated as follows :
[Outstanding Shares] x [Value of Each Share] = [Total Market Cap]
As you can see, it is not too difficult to project a large market cap by manipulating the arguments of this formula. Indeed, a great many coins/projects do this for various reasons, but the primary reason is that the size of a company (or coin in our case) by market capitalisation represents varying degrees of risk.
Large market caps ($10 Billion or more) are believed to be established enterprises with longer histories of competence. Though they have larger total size, they are not bound to give the largest returns. They simply have the best track record over the longer periods.
The problem with this is that coin market caps do not represent the full spectrum of a fully functional and operating company. For a start, a decentralised blockchain is by definition no bound to the performance of any individual company and thus it's market cap variations over time cannot be attributed to the performance of any marked enterprise or group.
Secondly, the market cap of most coins are grossly misrepresented or even purposefully manipulated. Remember, larger market caps are assumed (but not proven) to have lower risk returns over longer periods of time. So, by manipulating the figure to be as large as possible, investors who are none the wiser will therefore assume the larger market cap coins are safer investments.
How did that work out for Ripple? At one point, XRP (totally a security but that's another topic) almost eclipsed the market cap of Bitcoin and yet behind it, Ripple with their private permissioned blockchain and technologies like xrapid had little to do with the explosion and subsequent decline of XRP - their now very obvious useless token.
At point one, one of the founders of Ripple became one of the richest people in the world by net worth and this again was highly misrepresented as it was clear as night and day that his paper gains would be just that.
Because of the ludicrously high number of outstanding (shares/tokens/coins), most of which remain in the control of Ripple and it's cohorts, the market cap of Ripple is literally as easy to manipulate as the price of the token itself.
By controlling the vast majority of tokens, a manipulator need only move the price a little bit to make vast paper gains not only for themselves, but also for the market as a whole. This is further compounded by exorbitant issuance of coins, or a very high and unnecessary number of total outstanding coins. By having a total supply of 100 Billion coins, XRP needs only the price of each token to be worth a few dollars for it to supplant Bitcoin as the coin with largest market cap. And yet, it is very clear that in terms of sustainability, and long term viability, Bitcoin remains the king.
Do not be fooled by Market Caps. The truth is, there is no "cap"!
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Market caps are used as a milestone, it's also a delusional measure as, for example, in bitcoin there are many dead coins. Never to be used again.
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