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If you spend enough time lurking on the Internet, you come across many crazy theories. Cryptocurrency is a bit of a magnet for eccentricity, so it's no coincidence that we have a lot of Moon Landing and SEC Truther theorists in our middle.
There are cryptonauts who sincerely believe that McAfee is the reincarnation fueled by Abbie Hoffman's LSD (wait, that kind of credible), that the encrypted prices are completely free of manipulation (which is more difficult to digest) and our new preferred: the theory that the metrics for XRP are constantly underestimated on CoinMarketCap and other sites in order to hide the true value of the token.
This theory tends to re-emerge every few months, especially when XRP is doing particularly well:
What a bunch of F *****! Wow! They screwed us @CoinMarketCap ! Jesus what a horrible thing to do at XRP! They are responsible for manipulating the price and for many people who lose money … #SEC_News @SEC_News look at this!
– My XRP (@ MyXrp589) November 29, 2018
Here is the reasoning. There are 100 billion XRPs, created in the Genesis block of Ripple, each of which has a market price of $ 0.3513, for a total value of $ 35 billion and exchange rate. CoinMarketCap only counts the XRP currently widespread among the public, for a market capitalization of only $ 14 billion.
On the other hand, each of the 17.4 million bitcoins is worth $ 3.81, for a total value of $ 67.5 billion.
What makes this really interesting is that, at the height of last year's dizzying bubble, XRP would have actually had a higher market capitalization than Bitcoin, at least under the most generous metric.
This in turn has given rise to a whole series of derived theories, with the intent of bringing down the XRP token, misjudging the real value or excluding the South Korean markets, where XRP has a larger slice. of the cake.
RippleCoinNews (who must have lost the memo on calling him XRP) has recently re-proposed the non-story, with the title: "XRP fans think that CoinMarketCap is manipulating the market, asking for fair calculations."
Regardless of what you think of Ripple, it's hard not to smile at the thought of poor bankers and corporate financiers oppressed by The Man.
The mistake, as you probably understood, is that most of those tokens are stuck in effort and are considered unusable. If these tokens were available to the public, they could not easily be sold without affecting the price.
It is not the only legitimate way to calculate market capitalization. Yahoo! Financefor example, it includes the tokens entrusted in its calculations, giving XRP a cumulative value of $ 34.8 billion. And here it is from Ripple & # 39; s Mouth:
XRP Charts, a real-time dashboard of the Led XRP archive, shows the token market capitalization at $ 34.9 billion, with some points lost due to burns.
There are some positive points in this case: CMC does not include the XRP that Ripple has blocked in the commitment (about 60 billion), but includes up to 3.8 million Bitcoin lost, as well as the 1 , 1 million reported in storage by Craig Wright. Taking these factors into account, Bitcoin's market capitalization would be reduced to around $ 45 billion.
But the biggest lesson, on which we have repeatedly insisted, is that market capitalization is an inadequate measure for the value of cryptocurrencies, regardless of whether they are generously calculated or not. These calculations assume that every token can be sold at the most recent public price, ignoring the fact that cryptographic markets lack significant depth. Any major trade, if public, could trigger a sell-off, as might have been the case last month.
In addition, unlike stocks, the value of a currency depends on its use: HODLing could be better for the short-term price, but it does not facilitate adoption and circulation in the same way as spending and using them. .
The truth is that value, like beauty, is deeper than the skin.
Topics can now be started in our Telegram group.
The author owns both XRP and Bitcoin, which are mentioned in this article.
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