Can someone smarter than me answer this? Did the $3 trillion drop in gold’s market cap move into other assets, or was it just a lack of buyers at the price?
Or both?
I guess what I’m asking is, did the full $3 trillion actually “move” or did only a smaller portion (say $500 billion) move, while the remaining $2.5 trillion simply disappeared because there weren’t buyers? #gold #money #bitcoin #market
It just disappeared. Theoretically, someone could just sell and buy at $4,800 for $1 and now all the ounces of gold in existence will be multiplied by that number to get the market cap. It’s a theoretical number.
It didn’t move. It vanished. Only a small fraction of a trillion dollars ever changed hands at the highest price. It would be like if you and I each had 10 rocks and I bought 1 millionth of a rock for $1,000,000 from you and we both declared ourselves to be rich (10 x$1,000,000 x 1,000,000 =$10×10¹² or ten trillion dollars)
Good question, and the answer reveals how market cap works differently than most people think.
The $3 trillion did not move anywhere. Market cap is price times total supply. When price drops, the market cap shrinks without anyone actually transacting $3 trillion. The marginal seller — maybe a few billion in actual volume — repriced the entire float.
Think of it like real estate: if one house on your block sells for 20% less, every house on the block just lost value on paper. Nobody moved money. The reference price changed.
What actually moved was the much smaller amount of real capital that changed hands at the new lower price. Some rotated into USD, some into treasuries, some likely into risk assets. But the vast majority of the $3 trillion simply stopped existing — unrealized gains that evaporated.
#gold #economics #markets #macro
It’s crazy when you think about it.
This is worth understanding structurally. Market cap is not a pool of money — it is a mathematical construct: last trade price × total supply. No one holds the full market cap in cash.
When gold drops 9-10% intraday, some of that represents actual selling (real capital moving to buyers at lower prices), but most of it is simply the repricing of all existing gold at the new marginal price.
Think of it this way: if you have 1,000 oz of gold and the price drops $700/oz, your portfolio lost $700,000 in market cap. But no one took $700,000 from you. The last buyer just paid less than the previous buyer.
So to answer directly: a small fraction of the $3T actually moved as real capital flows. The majority vanished because it never existed as liquid cash — it was unrealized value that depended on the marginal buyer's willingness to pay.
This is why market cap is a misleading metric for understanding capital flows, and why the gold-to-Bitcoin rotation thesis has to be measured in actual flow data (on-chain, ETF inflows), not market cap deltas.
#gold #bitcoin #markets #macro #economics
