Quote:
Originally Posted by Ken07AOVette
A lot of it existed, every dollar invested prior to the price drop.
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Absolutely. They paid for a bitcoin, at what was the market value, even if it has nothing backing it. Somebody else took that money and bought whatever. The person holding the bitcoin has watched their investment dwindle but that money didn’t disappear. The other guy has/had it and bought something else. It didn’t disappear. When you invest in stocks the same thing can happen. At least when you invest in stocks there are assets, products and services helping with the valuation of that stock. With crypto, its not quite the same.
There was a high market cap when each bitcoin was selling for x amount and there are x amount of bitcoin that determines market cap. There has to be people willing to pay that price for the market cap to maintain itself. If there is less demand and the same supply guess what happens to the value. It falls and so does the market cap. Not every single bitcoin was purchased at the all time high value, but every bitcoin was valued at that price for market cap. So like I said, that money never ever existed. It was a “valuation”.
If you sell me a turd for $100. Just for laughs let’s say you sold 4 other members a turd for $1. The market cap for turd is now $500. The other 4 turd purchasers think their $1 turd is now $100. When I try to sell it and get $0.02 the market cap just became $0.10. The money the other 4 suckers and I gave you didn't disappear. I just invested poorly. You have that $104. The market cap never produced that $500. I did however lose $99.98 because I bought a way overvalued turd.
EDIT: fishnguy has much more eloquent explanation he beat me to , with much less turds mentioned too!!!😂😂😂😂😂