So as most of you already realise the worth of a coin does not say much to its total valuation, you have to factor in the coin supply. Marketcap is currently calculated as
coin current worth x coin circulating supply
But this leaves a lot of room for interpetation. The current market value of a coin is only based on the last trade of the coin, and so it can change really quickly. Besides that, the total coin supply is not even taken into account which may make coins like Stellar(XLM) scarier to buy: only 18 billion of 103 billion coins are in circulation. The current marketcap of XLM of 5.7 billion would be 6 times higher if you take total coin supply into account.
Of course all these coins won’t be released to the market instantly, but they will enter the market at some point creating downward pressure on the overall coin price.
When we look at the total marketcap of crypto, we are at 600 billion right now – but this does not take into account on one hand the coins that have been lost forever (sent to wrong addresses, misplaced private keys etc) and on the other hand the total coin supply. I would argue that the actual marketcap currently is over a trillion using all coins.
Another common mistake crypto beginners make a lot is to think that they somehow own a piece of the company when buying the coin. This is, in most cases, incorrect. Cryptocurrencies do not work like stock (apart from some). Take Binance (BNB) as an example: eventhough the worth of the company is currently in the billions, the coin does not have anything to do with this valuation – it’s pure supply/demand that creates a marketvalue for the coin. More users = more buypressure which CAN create a rising price!
Before starting to trade in the crypto world, its important to understand the fundamentals of the market, and in particular the coins you are investing in! Merry christmas, and lambo’s for all!