This post was inspired by some tweets that I saw yesterday between Ryan Selkis (Coindesk) & DoctorBitcoin:There is clearly a widely distributed misunderstanding of what a market capitalization actually is, and specifically as it refers to crypto currencies, and in particular, Bitcoin.I felt compelled to write this post as a result.This is by no means an exhaustive analysis, but it’s a good start to help clear up some market confusion.Please recommend this post on Medium and distribute this post to financial writers/journalists covering Bitcoin to help clear up the confusion.“Market capitalization is just a fancy name for a straightforward concept: it is the market value of a company’s outstanding shares.This figure is found by taking the stock price and multiplying it by the total number of shares outstanding.” — InvestopediaNow, to be absolutely clear, this definition was meant to apply to stocks — not commodities and definitely not digital commodities.Given the comparison is a semi-reasonable proxy for Bitcoin, and it’s widely understood by the financial press, let’s work with it.All data from this post comes from Blockchain.info, unless otherwise stated.You may have already have guessed where I’m heading with this, based on the data above, but nevertheless, let’s explore:I’ve done a quick analysis, based upon my understanding of how the Bitcoin world looks.

The dates I’ve used have some historical and some personal arbitrary significance.The first 2 dates are the two prior peaks (bubbles) of Bitcoin prices that many people will remember.The next 2 dates relate to my first two Bitcoin blog posts, Finding Equilibrium & Bitcoin Rising.July 10, 2015 is approximately 1 year before the Bitcoin rewards are halved this year on July 10th, and May 29th is yesterday, but 3 weeks after my post earlier this month on Bitcoin 2016, predicting the current short squeeze which started in earnest this weekend.Based upon my analysis, the ATH price for Bitcoin is $697.19 — which most Bitcoin technical & trading analysts, like BitcoinBullBear, will tell you represents a major breakout level for Bitcoin and will likely see a lot of resistance.This is because it IS an ATH for Bitcoin, not a technical level.The technical levels essentially confirm what I’m saying — even though the technical analysis is not factoring in the points above, it’s very clear from market behavior.The purpose of this post was merely to set the record straight.

So, if you’re in the Bitcoin world, please help educate the financial community that Bitcoin’s ATH is not c. $1151, but in fact c. $700 (and this adjusts, the longer it takes to get there, given the number of new coins issued daily).The same way that the Apple share price all time high is not $800 (they did a 6–1 stock split — so it’s $133).An alternative way of looking at it, for comparison purposes, is that Bitcoin is trading at $733 right now (as opposed to $528), relative to its previously reported ATH of $1151.bitcoin buena inversionI would love to see some technical analysts and chartists use my methodology, above, to replot and recalculate trendlines.When I predicted that Bitcoin will end the year at $1,000+, it’s on an net market cap adjusted basis — so therefore imputed market cap will be over $15bn — which will most certainly be an ATH for Bitcoin…Edit & Authors note: I’m not saying this is a akin to a stock split.bitcoin core to electrum

I’m inferring that when a stock split happens, the market capitalization remains the same for the company BUT the stock price is adjusted accordingly.This does not happen as the number of Bitcoins in circulation increases for no value every 10 minutes.Skip to Main Content Area Discussions » General Discussion and Questions Looking for this picture of Bitcoin capitalization compare other financial "instruments" #1ti-84 bitcoinBitcoin has led the cryptocurrency revolution for nearly a decade.bitcoin ledger downloadIn the process, it has become the most recognizable name in the new world of digital currencies, and for many years it dominated the industry by maintain a position of 80% or more of the total cryptocurrency market cap.bitcoin op ipad

In the past few months, Bitcoin has also skyrocketed in price, practically tripling in value since the beginning of the year.And yet, in spite of these indicators of its dominant status, there is reason to believe that one of Bitcoin's competitors, a much newer cryptocurrency called Ethereum, is on pace to overtake the iconic digital currency in at least one respect: market capitalization.bitcoin-qt stuck on block39% to 31% As Of Last Week By Wednesday, June 14th, Bitcoin had seen its share of market capitalization drop from 87% among all cryptocurrencies down to 39%.que es fiat bitcoinThis sharp decline is in stark contrast to the precipitous gains in value that have accompanied the coin over the same time period of roughly the past four months.ethereum currency symbol

At the same time, Ethereum has seen its share of the total market capitalization of digital currencies rise by a considerable amount, too.From 5% of all market capitalization just four months ago, the two year old currency has now claimed nearly a third (31%) of all market capitalization for the industry.dogecoin storeA graphic representation by analysts at CoinMarketCap reveals both the extent of Bitcoin's former dominance in the cryptocurrency field as well as the rapid shift which has brought Ethereum much closer to Bitcoin's level.Analysts Predict "The Flippening" Analysts have developed a term to categorize a time at which Ethereum overtakes Bitcoin in terms of market capitalization, as some cryptocurrency followers have expected to happen."The Flippening" refers to this shift in dominance in the field and, some say, may indicate a permanent shift in which Bitcoin steps out of the spotlight in the cryptocurrency world.

The Flippening could occur for a number of reasons.Bitcoin has long been the most dominant cryptocurrency, but it also suffers from significant problems of scaling which have threatened to dismantle the entire cryptocurrency system.Ethereum, on the other hand, having been developed much more recently, may have been able to anticipate some of the issues that Bitcoin's creators did not when they first programmed the code a decade ago.In doing so, Ethereum, could find itself in a better position for long-term growth than Bitcoin.As of June 14th, Bitcoin's market cap hovered around $45 billion, with a price per coin just below $2800, according to a report by Market Watch.Ethereum's market cap was roughly $36 billion at the same time, with a price per token of $390.In some ways, Ethereum may have already overtaken its older brother: a Motherboard report suggests that Ethereum has "almost five times as many nodes in its network as Bitcoin, meaning more people are using their computers to support it."