Today, I am very happy to share with you a HIDDEN EFFECT of the coins creation. When I say hidden, it doesn’t mean that the information is not available however it is far from being put in advance.
As you know BITCOIN will have a maximum supply of 21,000,000. At the moment the circulating supply is 18,377,725 meaning that 2,622,275 bitcoins are still to be mined in the future (As of May15th 2020, 87.51% of all Bitcoin to be ever created are available).
If we multiple the price of $9,508.68 by the circulating supply, we get the market capitalization of $174,747,815,419. The market capitalization represent the VALUE of the BITCOIN network as of today.
When looking at the past valuation of BITCOIN in May 2013 (see picture below), you can see that the Market Capitalization was of $1,288,693,216 and the price was $115.91.
Therefore, over 7 years:
- Market Capitalization increased by a factor of 135.6
- The price increased by a factor of 70.12
You may think WHY the factor is different? The difference of factor between the market capitalization and the price comes from the creation of new coin over time.
So indeed over time the overall Value of BITCOIN has jumped by a factor 135.6 and therefore the price of each coin took value. This is an amazing jump.
Now, if you look at FEATHERCOIN, you may have noticed that it was in the TOP 5 in 2013 with a market capitalization of $2,017,436 for 6,444,650 FTC in circulation with a price at $0.31 per coin.
Today the market capitalization of Feathercoin is $2,454,492 USD. So even if the price is now ridiculous at $0.0088 from a global market valuation perspective, the value of FEATHERCOIN has increased of 21%. It is ridiculous low performance for such an old and secure cryptocurrency but still, it took value since 2013.
This is what I call the “hidden effect” and I believe many people doesn’t pay attention to that especially when buying brand new coins.
Let’s take Hedera Hashgraph (HBAR) as an exemple:
- October 15th 2019 – Market Cap $23 millions; price $0.036
- January 15th 2020 – Market Cap $20 millions; price $0.01
- February 13th 2020 – Market Cap $223 millions; price $0.07 (here super jump for $0.01 to $0.07)
- May 15th 2020 – Market Cap $150 millions; price $0.036
Today, the price equal the price of October while the Market Cap is 6 times higher. The reason behind is that only 4 Billions out of 50 Billions HBAR are circulating right now and every day millions of new HBAR are created. So less that 10% have been mined.
In conclusion only a very strong project who can create massive value over time can have it’s unit price increase in the long term. In other words, it is less risk to buy old coins whereby many of the circulating supply is already “priced” correctly.
87.51% of Bitcoin are already available while 82.65% of Feathercoin are available. Those cryptocurrencies have a far more predictive future than the new coin with 10-20% of the circulating supply available, don’t you think?
I wish you a very good day,