Market cap, or coin price, doesn't reflect the real value. And it is dazzling so many people believe they do

Share price and market capitalization has long been used to evaluate a company's value. But, as any economist can tell you, they are rather "tricky" concepts.

The share price is highly influenced by supply and demand. The thing is, supply and demand are mostly based on predictions and speculations. They don't mean how much a company really worth, but rather how much people believe it does. And what people believe is hugely affected by emotions like fear, greed, hope and despair.

You can replace share price with coin price in crypto. Market cap is the same concept. And just like the stocks market (one can argue even more) It is based on emotion and speculation. If people think a coin is going up, they will buy and vice versa. It has little to do with the real value of a coin, nor the fundamentals.

For example a bunch of whales can buy huge number of coins. These will cause a pump which will rise the demand and hence the price. It does not mean that coin value really raised. It just means demand is higher than supply (for any reason). Same goes for other types of market manipulation like stock buyback.

I guess what I'm saying is, if you want to invest smartly, instead of focusing on market cap and coin price, you should focus more on fundamentals and tokenomics, as they can give you a clearer picture of how things really are. This way you might be able to avoid getting into the next FTX or Luna.