Ever heard of a coin called ucash? You should have. It’s in the world’s top 25 cryptocurrencies after all, based on market cap, placing it higher than stratis, omisego, and zcash. Making it to the hallowed heights of 21st, where ucash placed on February 12, calls for mainstream media coverage, a growing user base, and significant adoption you would think. As it turns out, ucash is an outlier – a nothing coin whose ascent is proof that you can’t judge a coin by its cap.
Fake It Till You Make It
It’s widely accepted that market capitalization – that is, the total value of all coins in circulation multiplied by their last traded price – is a crude reckoner. As an approximate guide to the relative size of respective cryptocurrencies, market cap usually suffices, but there are occasions when it’s glaringly wrong. Ucash is the perfect case in point. The obscure altcoin – or shitcoin, as such offerings are pejoratively described – rose out of nowhere this week to soar into the crypto top 100.
As anyone with a cursory knowledge of market cap metrics will know, gaming the system is extremely easy. All it takes is for someone to create a shitcoin with a circulating supply of 150 billion, list it on an equally shit exchange, sell one coin for $1 and instantly it’s worth more than bitcoin. The same trick that propelled dentacoin into 21st spot in the cryptocurrency rankings last month has now done the same for ucash. The exchange it’s traded on, BTC-Alpha, is a dubious Russian site, registered in the UK, with 600 Telegram followers, less than 2,000 Twitter followers, and a logo that’s ripped off of Maestro. But because it’s listed on Coinmarketcap, it’s eligible for inclusion in what passes for crypto’s “official” ranking system.
Getting High On Your Own Supply
There are 325 billion dentacoins in circulation and 8.6 billion ucash, which explains why they’ve managed to artificially climb so high. Whether or not ucash was the result of a pump and dump is immaterial; on low liquidity exchanges like BTC-Alpha, everyone’s a whale and every coin is ultra volatile.
Coinmarketcap’s extensive range of altcoins often makes for entertaining reading, especially when filtered by percentage gain. This week’s big performer, going by that metric, is unity ingot which is up 3,600%, though like ucash it’s only available on one tiny exchange. Although ucash and unity ingot are extremes, they illustrate why you should never judge a coin by its market cap.
Do you think there’s a better metric than market cap for rating cryptocurrencies? Let us know in the comments section below.
Images courtesy of Shutterstock, and Coinmarketcap.
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