> What works for companies doesn't work for cryptocurrencies. Companies have actual assets and cash flows, while cryptos do not.
This isn't actually relevant. Calculating market cap based on current trading price is equally valid for company stocks and cryptocurrencies. The divide is not between "companies" for which market capitalization is good and "cryptocurrencies" for which market capitalization is misleading, it is between objects for which the market capitalization is a reliable guide to the object's value and other objects for which it isn't.
You can judge the reliability of a market capitalization figure by looking at the trading volume of the object. If something has a market capitalization of $10,000,000 and sees $40,000 of trade per day, then you can reliably trade at the value reflected by the $10,000,000 market cap figure as long as the amount you're trading isn't significant compared to the background trading volume of $40,000 per day. If you try to trade $60,000 "worth" of whatevers, you'll crash or spike the price with your 150% increase in trading volume.
If something else has a $10,000,000,000 market cap and $40,000 of trade per day, then... you can trade at the value reflected by the market cap as long as you don't have a significant impact on the background trading volume of $40,000 per day. It doesn't matter that the market cap is a thousand times higher; it doesn't matter whether one of the things is company stock and the other thing is a cryptocurrency; what matters is whether you disturbed the normal trading volume, whatever that volume was.
Note that penny stocks see wild, spurious swings in their market capitalization all the time. That is because of their low trading volumes. It's not because Apple is a company and Shifty Joe's Investment Scam LLC isn't -- they're both companies.
It is relevant, because daily trading volumes aren't fixed, and if major shareholder in a company with decent expectations' of a sustained flow of profits starts offloading shares, the price doesn't need to drop very much to get institutional investors interested in buying that equity to hold it.
On the other hand Shifty Joe's Investment Scam LLC and crypto-tokens don't really have a price floor, but that's because neither of them have any assets or reliable stream of future income attached to ownership.
This isn't actually relevant. Calculating market cap based on current trading price is equally valid for company stocks and cryptocurrencies. The divide is not between "companies" for which market capitalization is good and "cryptocurrencies" for which market capitalization is misleading, it is between objects for which the market capitalization is a reliable guide to the object's value and other objects for which it isn't.
You can judge the reliability of a market capitalization figure by looking at the trading volume of the object. If something has a market capitalization of $10,000,000 and sees $40,000 of trade per day, then you can reliably trade at the value reflected by the $10,000,000 market cap figure as long as the amount you're trading isn't significant compared to the background trading volume of $40,000 per day. If you try to trade $60,000 "worth" of whatevers, you'll crash or spike the price with your 150% increase in trading volume.
If something else has a $10,000,000,000 market cap and $40,000 of trade per day, then... you can trade at the value reflected by the market cap as long as you don't have a significant impact on the background trading volume of $40,000 per day. It doesn't matter that the market cap is a thousand times higher; it doesn't matter whether one of the things is company stock and the other thing is a cryptocurrency; what matters is whether you disturbed the normal trading volume, whatever that volume was.
Note that penny stocks see wild, spurious swings in their market capitalization all the time. That is because of their low trading volumes. It's not because Apple is a company and Shifty Joe's Investment Scam LLC isn't -- they're both companies.