Another brilliant article explaining why people should stop with the market cap non-sense, as it is a very misleading indicator, not to say completely irrelevant.
On another note, the article demonstrates why Tether can be dangerous for the crypto industry.
Now let’s say Bob came to the market and decided to buy cheap apples and sell them at the higher
price.
Bob bought 1 apple for $1 and 1 apple for $3 (totally 2 apples for $4).
Then Bob started selling his apples for $5 each.
Now the order book looks like this:
sell 2 apples for $5 each (Bob)
sell 1 apple for $5
What will be the market cap after the first trade?
Right, $15! (price of first trade $5 multiplied by 3 apples)
So Bob invested $4, while the market cap increased by $12 (from $3 to $15).
This is very important, so let’s repeat. Bob invested only $4, but the market cap was increased by $12.