How much does the market cap increase when a certain amount of $'s go in the market?

0

Lets say that $1B worth of money is going in to bitcoin and its current market cap is $100B. How much would the market cap increase with that $1B?

Would it go to $101B, $105B, $110B, $100.1B?

I know that it will change according to how the money is put in. If they find someone selling by hand locally than it wouldn't affect the market price/market cap at all.

But I'm more curious on the average of the increase? I'm guessing there is a formula for it in finance? What is it?

demiculus

Posted 2018-04-18T08:30:40.370

Reputation: 101

It's not clear what you mean exactly. When you say "$1B worth of money is going in to bitcoin", do you mean that some bitcoins change hands for $1B? If so, why should that push the price up rather than down? Every time someone buys, someone else sells, right? – David Schwartz – 2018-04-22T18:32:47.920

Answers

2

Given that the Bitcoin market is pretty unstable + unregulated I don't think it is possible to predict the outcome of this.

Have a look at the paper Price Manipulation in the Bitcoin Ecosystem by Neil Gandal et al. to get an idea of why this is very hard (if not impossible) to predict.

JohnyDoe

Posted 2018-04-18T08:30:40.370

Reputation: 37

Maybe it is, so is there a formula for similar assets? – demiculus – 2018-04-18T13:09:30.800

Asked: 2018-04-18T08:30:40.370

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Active: 2018-04-18T09:55:17.157