I don't necessarily agree with it, but market cap is essentially the standard metric for how we measure value in our economy. If Apple goes down 10% people care because they're worth trillions and lots of people lose money. If a mid-size company goes down 10% a lot fewer people care.
I understand what market cap is but I don’t understand why it is relevant to your point. Apple is the same order of magnitude as bitcoin but you claim the media would care about a 10% move in the former but not the latter.
Firstly it doesn’t make sense to me because bitcoin isn’t a company, nor is it made of them so this doesn’t feel like a like-for-like comparison. Secondly it doesn’t make sense to me because I don’t understand why market cap should be related to media reactions to volatility.
I don’t see what cohesive theory underlies your claim that a big ‘market cap’ is required for the media to care about volatility.
I was saying Apple is the S&P 500 and Bitcoin is a random midsize company - it was an analogy. No analogy is perfect though, and you can certainly poke holes in mine (as you have).
> Secondly it doesn’t make sense to me because I don’t understand why market cap should be related to media reactions to volatility.
Because larger amounts of money matter more than smaller amounts of money. That's all. Penny stocks can fluctuate 1000x in a day but nobody cares.
I put it to you that market cap is not a particularly relevant quantity but the thing that matters is mostly a mix of retail exposure and expected volatility (as well as eg media interest). Bitcoin is basically expected to be volatile (which is why 10% down is not news). I think you were trying to make a point about retail exposure rather than market cap, but that does not sufficiently describe why the media care because a big move in something that is meant to be stable (e.g. some fixed income index) is smaller in percentage terms than a big move in something that is expected to be less stable (like an equity index).
Well the last part of my original comment was that most people just don't interact with crypto in the first place, which is what you seem to mean by retail exposure.
As for the rest, I disagree. If a million people lose 10% of their savings it matters more than if a thousand people lose 10% of their savings, and that's why market caps matter for anything publicly traded. The amount of money is what matters, and that's measured by market cap. Sure, we can get down into more granular details like how much of that market cap is the float, are people investing into certain stocks using their Roth IRA, or whatever other details - but the amount of money drowns out these factors in the aggregate.
Bigger market caps means bigger market makers with far more liquidity, so an average trade is much smaller in the grand scheme of things. When there isn't as much liquidity and smaller volumes, the market will move more quickly.