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A Cryptocurrency Website Changes Its Data, and $100B in Market Value Vanishes

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Re: A Cryptocurrency Website Changes Its Data, and $100B in Market Value Vanishes

#11

Post by agotterer »

Klathmon wrote: post #10

CoinMarketCap is in a tough position here. I can obviously understand not wanting to list massive outliers in an average, but at the same time there isn't realistically a way for them to "safely" adjust which exchanges they include in the averages. No matter what, it's either going to cause big sudden jumps in either direction, or they can "smear" it across some time, which (in my opinion) would look really bad as it…

I visit CoinMarketCap every single day and I don't recall ever seeing a notice or message about a change to the exchange listing.

Re: A Cryptocurrency Website Changes Its Data, and $100B in Market Value Vanishes

#12

Post by Klathmon »

agotterer wrote: post #11
Klathmon wrote: post #10

CoinMarketCap is in a tough position here. I can obviously understand not wanting to list massive outliers in an average, but at the same time there isn't realistically a way for them to "safely" adjust which exchanges they include in the averages. No matter what, it's either going to cause big sudden jumps in either direction, or they can "smear" it across some time, which (in my opinion) would look really bad as it…

I visit CoinMarketCap every single day and I don't recall ever seeing a notice or message about a change to the exchange listing.

Yeah that's really the only thing I can fault them on here. They really should have given some advanced notice that they would be changing how they calculate the averages.

Especially since they have a widely used API that many people use, and I'm assuming some trading bots as well.

Re: A Cryptocurrency Website Changes Its Data, and $100B in Market Value Vanishes

#13

Post by draw_down »

brndnmtthws wrote: post #6

It's facetious (and bad 'journalism') to claim $100B vanished. It was never there to begin with: market cap isn't something you can cash in on. It's merely the result of price multiplied by supply. If you owned a significant portion of all the coins in the world, and tried to sell them all at once, you wouldn't end up with number_of_coins * price, it would (realistically) be a smaller number given the market slippage…

I think the "vanishing" strongly implies that it was never there.

Re: A Cryptocurrency Website Changes Its Data, and $100B in Market Value Vanishes

#14

Post by everdev »

brndnmtthws wrote: post #6

It's facetious (and bad 'journalism') to claim $100B vanished. It was never there to begin with: market cap isn't something you can cash in on. It's merely the result of price multiplied by supply. If you owned a significant portion of all the coins in the world, and tried to sell them all at once, you wouldn't end up with number_of_coins * price, it would (realistically) be a smaller number given the market slippage…

From the title:

> $100B in Market Value

When the market price of an assets drops, it loses market value.

Re: A Cryptocurrency Website Changes Its Data, and $100B in Market Value Vanishes

#15

Post by brndnmtthws »

everdev wrote: post #14
brndnmtthws wrote: post #6

It's facetious (and bad 'journalism') to claim $100B vanished. It was never there to begin with: market cap isn't something you can cash in on. It's merely the result of price multiplied by supply. If you owned a significant portion of all the coins in the world, and tried to sell them all at once, you wouldn't end up with number_of_coins * price, it would (realistically) be a smaller number given the market slippage…

From the title: > $100B in Market Value When the market price of an assets drops, it loses market value.

Wrong. The market value is only what you get for it when you sell it. It's a subtle but very important difference.

A good analogy is comparing the advertised price of a used car versus what you actually get for it. You might think it's worth $5k, but there's only 1 person who wants to buy it and they're only willing to pay $4k, so it's actually worth $4k, not $5k. It doesn't matter if someone else sold theirs for $5k.

Re: A Cryptocurrency Website Changes Its Data, and $100B in Market Value Vanishes

#17

Post by nrhk »

frgtpsswrdlame wrote: post #3
vthallam wrote: post #2

Well that definitely contributed, but that alone didn't cause the crash. There was irrational price rise in the last few weeks for certain cryptocurrencies(Ripple, Tron) and this is part of the correction. Also, The market as a whole should get away with global averages and depending on one website to track everything. I wrote an article on it if someone is interested - http://coinsocial.io/2018/01/09/its-time-for-cr…

>There was irrational price rise in the last few weeks for certain cryptocurrencies(Ripple, Tron) and this is part of the correction. What makes their increase 'irrational'?

They were irrational because if you analyzed all the coins in the top 100-200 you'll realize that it was primarily cheaply priced coins that were making the outsized gains and a lot of it can be attributed to market psychology.

It feels better to own 200 of something you don't understand than 0.00159. But at the end of the day returns are returns and it makes no difference if you have 200 of a coin or 0.00159.

Re: A Cryptocurrency Website Changes Its Data, and $100B in Market Value Vanishes

#18

Post by frgtpsswrdlame »

nrhk wrote: post #17
frgtpsswrdlame wrote: post #3

Earlier quoted context omitted.

>There was irrational price rise in the last few weeks for certain cryptocurrencies(Ripple, Tron) and this is part of the correction. What makes their increase 'irrational'?

They were irrational because if you analyzed all the coins in the top 100-200 you'll realize that it was primarily cheaply priced coins that were making the outsized gains and a lot of it can be attributed to market psychology. It feels better to own 200 of something you don't understand than 0.00159. But at the end of the day returns are returns and it makes no difference if you have 200 of a coin or 0.00159.

Isn't the worth of any crypto-currency down to market psychology though? By that metric any price movement is irrational.

Re: A Cryptocurrency Website Changes Its Data, and $100B in Market Value Vanishes

#19

Post by Klathmon »

brndnmtthws wrote: post #15
everdev wrote: post #14

Earlier quoted context omitted.

From the title: > $100B in Market Value When the market price of an assets drops, it loses market value.

Wrong. The market value is only what you get for it when you sell it. It's a subtle but very important difference. A good analogy is comparing the advertised price of a used car versus what you actually get for it. You might think it's worth $5k, but there's only 1 person who wants to buy it and they're only willing to pay $4k, so it's actually worth $4k, not $5k. It doesn't matter if someone else sold theirs for $5k…

I hear this all the time, but does anyone really think that the market cap is what you can really get for an asset?

It's a metric, one as "untrue" as an average or median. It's not a contract, and you won't get that if you change the market, which selling and buying does.

I don't think that means we shouldn't use it as a metric to use to get information from for comparisons. And I don't think that it's bad journalism to say that the market cap dropped by $100B when it did, even if that doesn't equate to $100 billion being burned.

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