There is already banter about the price of LEO surpassing that of HIVE. To me, this is a lot of nonsense that shows how people focus upon the wrong stuff.
Of late, there is conversation about the Flippening, where the market cap of Ethereum surpasses that of Bitcoin. Notice how there is no mention about the per unit cost.
There is a reason for this: it doesn't matter.
When comparing two assets of similar class, such as stocks, a metric that is common is used. For many, it is market capitalization.
When it comes to crypto, this applies to everything but stablesoins. We talk market cap in that but we are really referring to distribution since they are pegged to $1.
In this article I will go through why the per unit price flipping means nothing.
The Flipping Of LEO/HIVE And Why It Doesn't Matter
Nothing like comparing apples to oranges and making a big deal about it.
There could come a time when the token price of LEO surpasses HIVE. When that time comes, we will see foolish posts talking how Leo surpassed it. Again, this is nonsense.
Leo has a cap of 30 million tokens. Hive is over 400 million. That is like comparing a stock with 1 billion shares outstanding with one that has 150 million. Which do you think will have a higher stock price?
If the companies are remotely close in market cap, it will be the lower issued one.
Naturally, the obvious component is market cap. Higher issued assets will tend to have a lower per unit price.
We can find many stocks that have a higher price than the $213 that Apple commands. However, there are only a couple which exceed the $3.1 trillion market cap.
Therefore, it does not matter if LEO flips the price of HIVE.
The Flippening
When we look at the Bitcoin/Ethereum situation, is anyone talking about ETH having a higher price than BTC? One is at $4K, the other $120K. Are people saying that Ethereum will top Bitcoin with this metric?
Not even the most optimistic ETH person is calling for this. The number of coins available is 6 times that of Bitcoin. Hence, just to be even, BTC will be 6x that on a per coin basis.
It all boils down to the total value of an entity. Since we are dealing with market driven pricing, the capitalization from there is all that matters.
How is this determined?
Simply take the per unit price and multiply it by the number of units. If we reverse it, the per unit price is determined by market cap divided by the units.
Therefore, the higher market cap is the main variable of value. Once we have the MC, more units will equate to a lower price (per unit).
At the present market cap, the price of HIVE, at 30 million tokens, would be about $4. That is a huge difference from 24 cents.
Leo having a total market cap of near $120 million would be a big statement. That would be an accomplishment showing the building of value of the ecosystem. Focusing upon the per token price is just noise when making a comparison.
It truly is apples to oranges.