In the crypto market, if the market value increases by 100 billion, does that mean 100 billion in new money has come in?
“By how much the market cap increased” and “how much new money was bought” look like the same thing, but they’re not the same entry.
Today, I cross-checked the calculation methodology between Binance Academy and CoinMarketCap. The basic formula for circulating market cap is reference price multiplied by circulating quantity. It measures the scale calculated at the current price; it does not indicate how much cash is sitting in accounts.
Let’s take a purely hypothetical example: Suppose a coin has 100 million circulating units. If the reference price rises from $10 to $11, the market cap increases by $100 million. But those 100 million units don’t need to be fully traded, and no one needs to actually put in $100 million in cash for that book-keeping change to appear.
The reverse is also true. “Vaporizing” $100 million doesn’t mean someone fully withdrew $100 million. When the price moves down, many positions that never actually traded will be revalued at the lower price. If you really sold in size, the average sale price would also depend on the counterparty and the execution path.
So when looking at the fund flows of BTC, ETH, and BNB, I separate market-cap changes, actual trading volume, fund subscriptions/redemptions, and on-chain transfers. Each item may be useful, but you can’t use one to impersonate another—and you can’t fabricate “the amount the main players entered” based on that.
Market cap can help compare the size of assets. But to judge whether buy-side demand is sustained, you need the corresponding money and trading evidence.
Wealth appears to have grown on the screen, but that doesn’t mean the same amount of cash has increased in the market.
$BTC $ETH $BNB
Tap my avatar to view single-handed live trades
“By how much the market cap increased” and “how much new money was bought” look like the same thing, but they’re not the same entry.
Today, I cross-checked the calculation methodology between Binance Academy and CoinMarketCap. The basic formula for circulating market cap is reference price multiplied by circulating quantity. It measures the scale calculated at the current price; it does not indicate how much cash is sitting in accounts.
Let’s take a purely hypothetical example: Suppose a coin has 100 million circulating units. If the reference price rises from $10 to $11, the market cap increases by $100 million. But those 100 million units don’t need to be fully traded, and no one needs to actually put in $100 million in cash for that book-keeping change to appear.
The reverse is also true. “Vaporizing” $100 million doesn’t mean someone fully withdrew $100 million. When the price moves down, many positions that never actually traded will be revalued at the lower price. If you really sold in size, the average sale price would also depend on the counterparty and the execution path.
So when looking at the fund flows of BTC, ETH, and BNB, I separate market-cap changes, actual trading volume, fund subscriptions/redemptions, and on-chain transfers. Each item may be useful, but you can’t use one to impersonate another—and you can’t fabricate “the amount the main players entered” based on that.
Market cap can help compare the size of assets. But to judge whether buy-side demand is sustained, you need the corresponding money and trading evidence.
Wealth appears to have grown on the screen, but that doesn’t mean the same amount of cash has increased in the market.
$BTC $ETH $BNB
Tap my avatar to view single-handed live trades
