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January 20, 2018, 03:12:56 PM |
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I 'borrowed' this;
So I thought I should address a common misconception that a lot of people have in crypto.
It looks like most people think if the crypto market cap is $600 billion, it means that the money invested into the market currently is $600 billion. That's absolutely not true!
The money actually invested into a market is called inflow. This is the actual money that has been invested into a market. Whereas, the market cap is the current circulating supply of crypto assets multiplied by the current price of those assets.
Here's a simple example to explain this to you.
Suppose someone invested $10,000 into Icon (ICX) at 10 cents and the current price of Icon is at $10, it would mean that the value of that $10k has increased to $1m. This $1m would represent the current "market cap" whereas the actual "inflow" of capital was only $10k.
Understanding the difference between these 2 figures is crucial because it can help you better understand the impact of certain factors
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