$BTC 97 ÷ 98 is the area to aim for!

I have come across a very thought-provoking article that I would like to share with brothers and sisters who enjoy discussing the price basket story of #PiNetwork 👇👇👇

The misunderstanding among crypto traders regarding market capitalization, especially for coins with fast transaction speeds like Pi Network, may stem from two factors: lack of economic knowledge and lack of technological knowledge. Below are the main reasons:

1. Misunderstanding of market capitalization in Crypto

Most crypto traders are familiar with traditional ways of calculating market cap, but they do not deeply understand liquidity and transaction speed.

Common mistake: "High Market Cap = High Price"

In securities, market cap reflects the total value of a company.

In crypto, market cap is merely a calculated number based on circulating supply × price, but it does not guarantee actual liquidity.

Mistake: They think that if market cap is too large (e.g., 100 billion USD), then the coin price cannot increase, but they overlook the transaction speed factor.

💡 Problem: If a coin can be reused continuously throughout the day, it does not need a high market cap to handle large transaction volumes.

2. Lack of economic knowledge: Not understanding the impact of transaction speed

Traders are often familiar with traditional financial systems, where transactions take a long time (SWIFT, banks, stablecoin USDT on Ethereum...). They do not realize that:

In a slow system: Money must "stay still" in the system to ensure liquidity → requires high market cap.

In a fast system (Pi Network): Money can circulate continuously, reducing the need for high market cap. (more to come)