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By CCN.com: The total market capitalization of the cryptocurrency market is currently over $ 120 billion. However, studies show that this market capitalization is in billions of dollars because of intrinsic inflation. In 2018, $ 15 billion of new chips were added to the offering, reinforcing the overall market value, even when prices fell.
Bitcoin inflation adds more than $ 5 million a day
On average once every 10 minutes, 12.5 new bitcoins are added to the market. If we just call the base price of $ 3,000, it's $ 37,500. The actual amount added to the market capitalization is actually much higher at the moment, but for the argumentation we will use an easy rounded number. Each day, this represents a total of $ 5.4 million in new coins. These new coins are also miner's rewards, meaning they're likely to end up on the markets. Miners have thin margins even when the markets are doing well (because more minors are involved).
Bitcoin SV and Bitcoin Cash do not always hit the 10-minute block target (neither bitcoin, nor any bitcoin fork either), but for the sake of argument, we'll say that they do it. These are 1,800 more coins per day each, with a total value of $ 360,000 additional at current prices. We can deduce that the three variants of Bitcoin add a minimum of $ 5.7 million each day to market capitalization. Every 175 days or so, that represents $ 1 billion, even though the markets were frozen and there was no operation.
Market capitalization may not be the best measure
These numbers are all in the middle of a bear market, where prices per piece are low. The numbers become much more extreme during bull races. Ethereum and all its chips also contribute to the inflationary effect. According to a new report published in Diar, Ethereum itself would have added $ 1.5 billion via inflation. The overall market has seen an overall increase of around 35% thanks to the arrival of new chips on the market.
What stands out even more like a sore thumb in the middle of a bubble bursts is the $ 5 billion value that cryptocurrency traders have appreciated for new chips that did not exist at the beginning of the bear market – parts that, for all intents and purposes, remain nothing more than extra noise in a country with overcrowded decentralized promises. […] In the end, the new blockchain offer in 2018 accounted for almost all of the market value of early 2017.
Inflation is not a sign of growth
Market capitalization represents only the price of tokens multiplied by the number of chips. It does not take into account purchase orders, which could give a very different picture of the cryptosphere. If a central bank adds $ 1 billion in new dollars to the economy, has the value of the fiat increased or decreased? Is it really different in cryptocurrency?
The question of liquidity, even for Bitcoin, arises. Is there really money to buy all the parts at current prices? The exchanges are done on a micro base. Parts of a room or a small block of rooms are traded in infinity. Parts entering a given market can be traded hundreds or thousands of times before the same value disappears. This creates the very important metric of transaction volume, which some stock markets simulate.
But it's a discussion for another time.
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