Market Capitalization in the virtual currency space seems to be highly inaccurate. For example, XRP claims to have a larger market capitalization than what CoinMarketCap (CMC) shows, while others believe that it has less than what it currently has.
At the same time, we always check CoinMarketCap statistics and the market capitalization of the most valuable virtual currencies. In order to have any coin’s market cap, CMC multiplies the latest market price by the total number of coins available.
For example, if there is an individual that makes a small purchase paying a large sum of money for it, the market capitalization would immediately increase. Clearly, this is something that is highly inaccurate and does not help the space.
Hard forked coins have another problem. Their market capitalization includes those coins that have not even been claimed by users. Bitcoin SV has a market capitalization that is calculated on the premise that there are 17 million BSV coins waiting for a buyer.
According to data provided by Blockchair, one in five BCH users did not split their wallets and claimed their BSV coins. At the same time, the number of active addresses remains low for Bitcoin SV and Bitcoin Cash compared to Bitcoin. If less than 25% of the coins have been activated on Bitcoin SV, that means that it should have a market capitalization similar to NEO, or even less.
A new proposal made by CoinMetrics is to start thinking about realized capitalization. This measure takes into account blockchain activity which allows measuring crypto value in a much more accurate way.
CoinMetrics commented about this:
“Its crux is to value different part of the supplies at different prices, instead of using the daily close as the market cap does.”
This metric has also its own problems. It provides a historically-weighted capitalization for Bitcoin transactions. This is able to include actual economic activity into the movements of virtual currencies. According to this measure, Bitcoin SV would have a market cap around $500 million.
At the moment, these metrics are available for just some virtual currencies. In the future, CoinMetrics says that it can be generalized to other blockchains. Virtual currencies must be analysed in a different way to have more accurate results than what we currently have. This will improve the market and allow it to progress even further.
As CoinMarketCap reports, Bitcoin SV has a market capitalization of $1.52 billion with a price of $86 per coin.