[pavlov]

Crypto market cap is a made up, manipulated number. The actual amount of dollars in Ethereum is nothing even close to that.

The average Fortune 500 internal software upgrade probably has more real revenue on the line than an Ethereum update.

Imagine that this update fails and Ethereum goes down. Who’s going to actually notice? Traders on exchanges like Coinbase or Binance wouldn’t be affected. The price would crash, sure, but their actual trades aren’t on Ethereum. Crypto is all about perception of decentralization. It’s a story, not a product.

[chrisco255]

It's not a made up number any more than a stock's market cap. Is Apple really worth $2.5 trillion? I dunno, seems like a lot, but the market determines what things are worth.

But for the record, there's more than $100B in USD-backed (cash and equivalents-backed) assets on the Ethereum blockchain. Plus billions of dollars worth of on-chain organizations and applications that exist (Uniswap, Aave, Compound, GMX, etc). More than $28B moves on chain every day: https://money-movers.info/

[pavlov]

> "It's not a made up number any more than a stock's market cap."

This is a common crypto talking point but it makes no sense.

Companies are regularly acquired at a premium to their market cap, often in cash. For instance, Elon Musk signed an agreement to pay $44 billion to take Twitter private. Assuming the deal goes through, every single shareholder of Twitter is going to receive cash in exchange for their shares.

There's no such process for cryptocurrencies. It wouldn't make any sense for someone to acquire every instance of a coin. Coins don't pay dividends. They don't represent any kind of underlying assets. It's just weird to pretend that they have a market cap in the same sense as stocks.

[noch]

> Coins don't pay dividends. They don't represent any kind of underlying assets.

Every honest crypto market participant has long admitted that no one currently knows a good model for valuing crypto tokens. Indeed this is widely accepted. As a result, there is such a massive speculative premium placed on them and their prices are extremely volatile.

However, Ethereum will now pay a yield native to the protocol and so discounted [cashflows][1] apply in "Eth" terms. To try to value that ["internet dividend"][0] in USD is, however, still speculation and so ultimately reliant on global [liquidity][2] conditions (how much banks "print").

[0]: https://link.medium.com/HGOCQMUbltb The Web 3.0 Yield Curve

[1]: https://ethereumcashflow.com (pdf)

[2]: https://twitter.com/42macro/status/1550487881956802563

[meowkit]

> There's no such process for cryptocurrencies. It wouldn't make any sense for someone to acquire every instance of a coin. Coins don't pay dividends. They don't represent any kind of underlying assets. It's just weird to pretend that they have a market cap in the same sense as stocks.

Feel free to come back to these comments in 10-20 years, but one of the moonshot goals is to make blockchain networks base layers for all financial processes in the world and implement all the things you want from any asset class as applications on top of a globally distributed virtual computer.

Additionally, the same arguments can be made of any fiat currency. The US dollar doesn't represent anything except >faith in a system<. The relative value of any blockchain is the >faith in it as a system<.

[pavlov]

> "the same arguments can be made of any fiat currency"

That's just moving the goalposts because we were talking about market cap of stocks specifically.

I'm happy to check back in 10-20 years. I made an Ethereum wallet in 2017 and still haven't used it for anything meaningful. Anecdotally, the same seems to apply to everyone I know. I honestly don't think that will have changed by 2032. I don't think my stock portfolio will be on Ethereum then.

[archiemckenzie]

Not necessarily — commodities like gold have similar properties and they are also generally given a market cap.

[Zanfa]

However commodities also have inherent utility that cryptocurrency doesn’t.

[DennisP]

Ethereum has actual users who pay to run applications built on top of it.

[chrisco255]

Pretty bad example because Elon Musk is currently in court to back out of the deal or get the price reduced.

Companies are also regularly liquidated for next to nothing or go bankrupt and disappear altogether (ie Enron, Lehman, et al).

There is no such process for cryptos because they are decentralized and no one owns 100% of the supply or has the authority to authorize a takeover. They are more akin to commodities in that sense. Could you buy all the world's lumber supply? Of course not, not even if you were Musk.

Ethereum has been a yield producing asset since Beacon chain went live in December of 2020.

[RestlessMind]

> Crypto market cap is a made up, manipulated number. The actual amount of dollars in Ethereum is nothing even close to that.

Would you apply same reasoning to NASDAQ stocks? Or Gold market cap?

[seibelj]

I mean META stock is down 60% YoY and the revenue is the same. Hard to argue what is "manipulated" vs. perception