Total Crypto Market Cap is now $2.4 trillion!!! Bitcoin commands around $1 trillion of this total. Impressive for a sector that seemingly started at zero. During this journey from zero to a couple trillion, no actual wealth was created. It just changed hands (transferred) to the person willing to pay the highest price.
Take for example, Shiba Inu. This week, Shiba Inu went from a market cap of 13 billion to 20 billion only to go back to 13. During this time, only 3 billion worth of Shiba Inu was transacted. how does that make sense??? Market cap only looks at the current value, or the last price transacted. So market cap can fluctuate by billions like in this situation by a "share/coin" being transacted at a higher value. In order for Shiba Inu investors to realize their gains of 13 billion market cap, is to find other investors willing to pay a value of 13 billion market cap.
The difference with stocks is that, the investor does not need to sell inorder the value in his shares. They can hold their share and collect dividends. Companies use the money from investors to create wealth for their investors. ex. Apple uses your money to develop their new product and the profit leads to higher cashflows allowing you to collect a bigger dividend or sell your share for higher price - in the process - creating wealth. A company that does not provide dividends still has a plan to create more money and increase the companies cashflow. In crypto, every time an "investor" realizes a gain for themselves someone else needs to put their chips on the table. This works unless you are one of the biggest fools holding the bag.
Same can be said about stocks which don't pay a dividend: Tesla, Amazon, Alphabet, etc. Ponzi assets.
arama-nuggetrouble
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@T-r-X, Yes, but I do not consider them the same. 1. These companies could give out dividends in the future. 2. They keep their dividends in order to reinvest for better cashflow. 3. They have a plan to bring in more money. When an investor sells, I would not call it the greater fool who is buying in all cases. Investors can preform research to see whether the company is on track to raise their income.
T-r-X
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@nuggetrouble, Profits realized on these stocks come from other investors. Companies like Alphabet, Amazon, Tesla don't pay anything to their shareholders.
arama-nuggetrouble
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@T-r-X, true, but I think whoever buys a share, from an existing investor in that company that sells, is in it expecting their money to go towards investing in future growth so there will come a time where they can sell to another investor who holds higher valuation. Now that is not to say, the biggest fool theory does not take part in the stock market aswell, the difference is, it just doesn't run on it. yes exactly as you said Ponzi asset.
Couldn't agree more. When the market deleverages, alt coiners will experience what it feels like to sell a house in 2008/2009.
frespin51
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Pero por lo menos las empresas generan riqueza y puestos de trabajo, pero tiene sentido que una criptomoneda como SOLANO en menos de un año suba un 20.000 %, pero es que nos hemos vuelto locos o que. Esta burbuja de las criptomonedas será una atentica carnecería. Yo ya soy mayor para meterme en estas aventuras que son puras estafas piramidales y sueños de cuatro soñadores. No tardaran los estados de poner fin a esta locura
arama-nuggetrouble
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@frespin51, Sí, las empresas generan riqueza y empleo. Crypto es especulación. Las acciones son inversiones.
Ponzi assets.