Ever since I started covering cryptocurrency on True Capitalist Radio, I’ve seen a plethora of different coins emerge. What’s really disturbing are these cryptos with tens of billions in circulation, and the pumping of them from many different medias. The culmination of this combination has been billions of dollars of “dumb money” coming into the market purchasing these high circulation “shitcoins.”
Take the recent hype of TRON ($TRX) and RIPPLE ($XRP). I’ve personally seen posts on various social media claiming these shitcoins will one day reach $1000 a coin. This $1000 a coin theory comes from the naïve perspective of comparing the price with Bitcoin alone; without factoring anything else. What “dumb money” doesn’t factor in is MATH! The current circulation of TRON ($TRX) is 65,748,192,476 and RIPPLE is 38,739,142,811.
If one multiplies the circulation numbers mentioned previous by $1000, you’ll get a total of $65,748,192,476,000 for TRON and $38,739,142,811,000 for RIPPLE. These numbers exceed the amount of fiat currency circulating the Earth ($80 trillion). With basic Math, a rational investor can clearly see that ANY coin with tens of billions in circulation will NEVER reach $1000.
Although circulation is certainly not the ONLY factor when deciding to invest in a cryptocurrency, new investors in cryptocurrency don’t seem to factor ANYTHING and are buying on hype and/or suggestion. At the very minimum, without knowing any technical analysis of cryptos, consider how many coins are in circulation when speculating on its potential price. It’s simple economics; supply and demand!
Don’t feel bad if you never considered this factor when crypto investing. Not even Wall Street understands the crypto game. Cryptocurrency is rewriting economics and the theories behind it! Get in before its written!
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