Although the issues around the market cap statistic have been known for quite some time, it’s always worth reminding newcomers to the space that those numbers and rankings listed on sites like CoinMarketCap can be misleading. In a recent report from digital asset management firm CoinShares, the issues related to comparing various crypto tokens based on market cap were covered in reference to the Bitcoin Dominance Index. In the CoinShares report, it is noted that bitcoin’s dominance grew to over 50% in the third quarter of 2018, with Ripple’s XRP token also growing from 7% to 11% of the market. Of course, it’s also questionable as to whether XRP should be considered a crypto asset at all, but that’s another topic. After pointing out these changes in bitcoin and XRP’s respective levels of dominance in the crypto asset market, the CoinShares report adds a bit of a disclaimer to the numbers. “A note of caution when referencing these figures: while illustrative to a certain degree, market cap in crypto can be a metric containing dissimilar information depending on the asset in question,” says the report. “In particular, the market caps of premined tokens such as ETH, XRP, EOS, XML etc. can return distorted impressions of true network value.” As an example of this point, the CoinShares report refers the reader to recent analysis from Messari Crypto, which argues that XRP’s market cap is overstated by as much as 48%. “If one agrees with the Messari methodology—we are certainly inclined to—it would effectively cut the XRP market cap in half, reducing XRP to a current 6% of industry total,” adds the report. Due to these issues around market cap statistics, CoinShares finds relative sizes of crypto tokens’ market caps less interesting than changes in the individual market caps themselves, which are more closely tied to general price movements. For a more in-depth explanation of the issues with the market cap metric and some alternative stats that can be used, see this previous post from Forbes.