Market Cap Fallacy

"$10M per Bitcoin would mean a market cap of $210T. There is not enough money in the world for this to happen".

This is the market cap fallacy.

Imagine that in the future BTC has become a universal store of value, people and institutions keep it in deep cold storage and there is only 1 BTC available for purchase in the markets. People and institutions find it so desirable and there is so much competition for acquiring that one single BTC that someone pays $10M for it causing the market cap to go to $210T. Did we need $210T to flow into BTC for the market cap to reach $210T? No, we only needed $10M for this to happen in this case.

This is a potentially unrealistic and extreme example for illustrative purposes only and it might or might not happen. That is not the point.

The point is: market cap depends on price but price does not depend on market cap. Price is determined at the margin and is driven by supply and demand only. Anything is possible.

Let that sink in for all the "market cap people".

Not financial advice.

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