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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

#31

Post by jstanley »

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.

But the market price didn't drop.

An aggregator changed its reporting methodology. Coinmarketcap is a price aggregator, not a market. All of the markets are unaffected, it just happened that the markets that got removed from the aggregator are the ones that had the highest prices. But they're still there. You can still trade on them the same as before.

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

#32

Post by ringaroundthetx »

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…

This is the same standard all assets are held at.

Your point is moot. That ship sailed 100 years ago.

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

#33

Post by DennisP »

jstanley wrote: post #31
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.

But the market price didn't drop. An aggregator changed its reporting methodology. Coinmarketcap is a price aggregator, not a market. All of the markets are unaffected, it just happened that the markets that got removed from the aggregator are the ones that had the highest prices. But they're still there. You can still trade on them the same as before.

Actual prices on exchanges did drop temporarily, apparently because a lot of people panicked.

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

#34

Post by DennisP »

brndnmtthws wrote: post #27
everdev wrote: post #23

Earlier quoted context omitted.

Wrong. https://www.investopedia.com/terms/m/marketvalue.asp Market value definition: > obtained by multiplying the number of its outstanding shares by the current share price The reality of selling has nothing to do with it. It's just a math equation.

How can a thing which never existed to begin with vanish? There wasn't $100B sitting around in a bank account waiting to be claimed, which then suddenly evaporated. Also investopedia isn't exactly a high quality source.

It's not only dollars that have value. Lots of assets do, like company shares.

In the stock market, if a company has ten million shares at $100 each we say the company is worth a billion dollars, even though that $100 price is only the most recent transaction. We say that because if price times quantity didn't match what the overall market thinks the whole company is worth, the price would quickly correct until it did.

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

#35

Post by module0000 »

everdev wrote: post #23
brndnmtthws wrote: post #15

Earlier quoted context omitted.

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…

Wrong. https://www.investopedia.com/terms/m/marketvalue.asp Market value definition: > obtained by multiplying the number of its outstanding shares by the current share price The reality of selling has nothing to do with it. It's just a math equation.

Investopedia should not be your source of truth. While you can get quality education for free on the internet in various subjects(math, CS, biology) - financial markets is not one of them.

Market value is exactly what the parent asserted it is, and the source of truth for that is your bank. If you are long 500k shares of AAPL and the quote is $100 - your bank will not consider you to have $50mil liquid assets. They know(and you should to) that starting to unwind a position of that size will decrease the market value a considerable amount.

Maybe an example will help you out here.... Let's walk through that AAPL example. You are sitting on 500k shares.

Step 1: Order 100,000 shares sold at market.

Step 2: Observe your average sale price is more likely to be $90-95 than $100.

Step 3: Order another 100,000 shares sold at market.

Step 4: Observe your average sale price is more likely $90-91 than $90-95.

Steps after this: same result, diminishing prices resultant from your sale(s).

See a trend here? The market value of your assets is decreasing based on the market's perception of value, not on the mechanical formula investopedia fed you. Your unloading of shares is going to decrease the perceived value, which decreases the price you can sell them for.

tldr; investopedia's advice on markets is barely more accurate than urban dictionary's advice on word meaning.

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

#36

Post by notyourday »

module0000 wrote: post #35
everdev wrote: post #23

Earlier quoted context omitted.

Wrong. https://www.investopedia.com/terms/m/marketvalue.asp Market value definition: > obtained by multiplying the number of its outstanding shares by the current share price The reality of selling has nothing to do with it. It's just a math equation.

Investopedia should not be your source of truth. While you can get quality education for free on the internet in various subjects(math, CS, biology) - financial markets is not one of them. Market value is exactly what the parent asserted it is, and the source of truth for that is your bank. If you are long 500k shares of AAPL and the quote is $100 - your bank will not consider you to have $50mil liquid assets. They k…

AAPL 500k shares? Yeah, not correct. AAPL average 50 day daily volume is slightly less than 28 million. Sell Day 500k AAPL bid - 0.001 SHOW QTY 100 won't move a market at all.

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

#37

Post by notyourday »

module0000 wrote: post #30
vthallam wrote: post #5

Earlier quoted context omitted.

When you are betting on Bitcoin or Ethereum, you are betting on the technology, developer community, ecosystem and the adoption. With Tron, there's hardly a product and Ripple while seems to have some successful pilots, is still far from realizing the dream of replacing the FIAT currency among banks.

>> When you are betting Full stop. You are trading or investing - if the word "betting" passes through your brain, stop now . The public surge of interest in crypto currencies is a redistribution of wealth from retail speculators to professional speculators. You aren't betting on the technology, developer community, ecosystem, or adoption anymore . At this point, you are betting you aren't the last one to the party.

Do you know what is a bet gone wrong? It is investment.

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

#38

Post by michaelbuckbee »

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 keep asking if there is a better term than than straight MarketValue (shares * share price). Quoting from a previous comment of mine:

Imagine two different sets of digital objects: AlphaCoins and BetaCoins - they're identical in the say way physics professors say "imagine an infinite frictionless plane". Both have a 1000 in circulation.

Both are worth $10 each.

Both have a market cap of $10,000 US Dollars.

But the market for AlphaCoins is "thin" (small changes in supply and demand make for really big price swings).

There's a run on the market and everybody wants to sell off their coins.

After a day's trading:

AlphaCoins price is $3 / coin.

BetaCoins price is $9 / coin.

For goods and services you'd call this the price elasticity of demand (You can change the price of medicine and people will keep paying it b/c without it they'd die - it's inelastic - the same can't be said for a snack bag of cheetos).

To me, this is the article's argument. That while these terms describe the same things across markets there are some big differences not captured in simple "market cap" comparisons.

Maybe a better analogy is two all you can eat restaurants (identical, yadda yadda) but at one you can use your full set of dining implements and at the other you can only use a fragile toothpick to eat your food with - and all anyone can write about is how the quantity of food in both places is the same.

Can an economist or serious financial person please tell me what this term is called?

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