Price not mcap; marketing won!
Marketing 1-0 Retail
“When DOGE/SHIBA/FLOKI goes to $1, I’ll be super rich”
Everyone or their mother is or has heard someone say something like this. It could either be about the latest shining memecoin with ridiculous names like QueenHampsterInu, MoonDogeShib etc., or big old ne'er-do-wells like Ripple, HEX, Cardano, or the infamous ICP (sorry to the maxis but they’re shit). There is always the forced narrative that if the token price goes up from X to Y they’ll become millionaires.
The large majority of people who say stuff like this are newbies to the space, or people who aren’t particularly knowledgeable, that shows first of all that more education is required from all in the space to teach them that there are factors that influence price. But it also begs a pertinent question which is why is price seen as the most important indicator of growth rather than the market cap.
The market cap of the token shows not just the token market cap relative to the entire market, but also how large a project can grow to. Some market cap projections are just unreasonable at best, and understanding market cap shows one that some prices are in themselves unreasonable as they would in-turn lead to unrealistic market caps
Let's have a quick scenario with Shiba Inu (SHIB) which is one of the most popular memecoins, the second largest after DOGE.
At the time of this writing it stands at a price of $0.00001185 with a market cap of $6,988,774,730. If SHIB was to hit the market cap of Bitcoin, which right now stands at $381,526,682,178, the price wouldn’t still hit $1 it’d be at $0.000647. So first, it can’t get to the market cap of Bitcoin, but say in some parallel universe it were to get to this market cap it still wouldn’t hit $1. So to hit $1 it has to get to market cap absurdness beyond the human mind.
Now that we have established that price is the most unreliable future predictor, we have to ask how did token prices become so highly rated? Higher than the market cap.
My answer to this while being a bit opinionated is that it was a function of marketing. Think back to why you got into crypto in the first place. A handful got in for the tech itself, but while I have no official stat to back this I'm hazarding a guess that at least 70% of people got in because of the Bitcoin story. Where you hear that if you had bought $10 Bitcoin in 2009, you’d be a multi-millionaire today.
They got in because marketing pros in the space kept pushing prices rather than market cap. There are many stories of this narrative driven by Marketing teams, especially memecoins, to drive retail to focus on price of assets rather than market caps. To the extent that now the price of assets are seen as the sole determinant of its potential.
Is it malicious on the path of Marketing teams in the space to do this to retail? No it isn’t, this was the narrative needed to attract retail exit liquidity and it suckered them in. So next time you ask yourself if marketing is important, remember that apart from Satoshi, marketing created this trillion dollar industry that we today play in. If the narrative hadn’t been right retail wouldn’t have flocked in like they did, further bolstering the industry.
Cheers to marketing!