What is Market cap in crypto and How to Calculate .

2s18...2N4W
8 Dec 2023
87

In the world of crypto , market capitalization (also known as market cap) refers to the total value of all the coins or tokens in circulation. It is calculated by multiplying the current price of a cryptocurrency by its circulating supply. For example,

Bitcoin Cash ( BCH).
The current price of BCH is $250.
The circulating supply is 21 million
So market capitalization would be

250.0 price × 21 million supply
= $5.25 Billions.

Another Example by SOL.
Solana has circulating supply today 425.93M with price of $62.05
So how we will calculate the market Cap of Solana,

425.93 Millions x $62.05
=$2.67 Billions.

Why market cap?
Market capitalization is often used as a measure of the size or importance of a cryptocurrency and is an important factor in determining its position in the overall cryptocurrency market. Higher market capitalization generally indicates a more established and widely recognized cryptocurrency, while lower market capitalization may indicate a newer or lesser-known cryptocurrency

Today's total global crypto market cap touches $1.61 Trillion and Top market cap asset's
Data is for 8th December, because market cap varies with price.

Bitcoin (BTC): $848.44 Billions
Ethereum (ETH): $285.10 Billions
Tether (USDT): $90.28 Billions
Binance (BNB): $35.68 Billions
Cardano (ADA): $34.16 Billions
Solana (SOL): $30.77 Billions
USDC : $24.77 Billions

Top Crypto with Circulation supply.
Bitcoin (BTC): 21,000,000 BTC
Ethereum (ETH): 124,900,000 ETH
Tether (USDT): 68,051,509,648 USDT
Binance Coin (BNB): 192,532,200 BNB
Cardano (ADA): 32,032,750 ADA
Bitcoin cash ( BCH) :21,000,000 BCH

What we can extract from market cap?
The market cap is symbol of strength, dominance and size of any Crypto currency and investors always looks into it before any investment. It is also a visibility scale of project which present the power and energy in the currency.
When evaluating the importance of market cap for cryptocurrencies, here are some key points to consider:

1. Large market caps ( bigger in number) tend to indicate stability and credibility, as they suggest that the cryptocurrency has gained widespread acceptance and adoption. This can make it more attractive to investors and users alike. Larger market cap mostly stands to minimum+10 billions like Bitcoin, USDT, Ethereum and USDC.
2. Small market caps and middle class MC with $1+ billion and $1- Billion value don't necessarily mean a cryptocurrency is bad or unviable. Many successful projects have started with small market caps before growing significantly over time but larger market caps generally imply a stronger track record and greater potential for future growth.
3. The ratio of market cap to trading volume can be an important metric as well. Here we must count tread and fear index as well , If a cryptocurrency has a high market cap but low trading volume, it may not be as liquid or active as others with lower market caps but higher trading volumes.

What reflects to investors in Market cap?
The current figure of the day of Market cap has influences over investors, traders and brokers. They assume some basic things like ,

  • Stability of the crypto currency.
  • Investment Risk ratio.
  • The assessment of liquidity to sufficient level.
  • Trending chart about the crypto coin on certain period.
  • Decision making assessment.

Keep in mind that Market capitalisation is not a value. It is number of the day which can be changed by fluctuate the liquidity. Then lot of other factors also can drag down the price of coin which ultimately will reduce the market cap.

From where to get ?
Coinmarketcap is most authentic, reliable and trustworthy platform to get the market cap figures for any crypto currency.

And heat chart of market cap showing the share of coin from total value,
Almost all the crypto projects are covered there. Any new crypto project always found to be listings at coinmarketcap for their visibility and authentication. It offers different filters to eases the search and rankings on base of Market cap.
Advice for the Day .
don't believe on paid Maximilian pockets. Do your own research always.

That's all for today, Like & thumb up to wow and leave comments for feedback.

Note: The article has been appeared on read.cash as well .

Cheers,
Amjad.

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6 Comments

B
Paul50
I always use a combination of volume, circulating supply and market cap when determining what to buy. I think volume is what I look at most because a huge increase in volume can tell you something is happening with a particular coin to make its volume spike. If there is a huge volume increase then I investigate further and sometimes discover some really positive news.
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