Market Cap, what is it? understanding of the

Market Cap, what is it? understanding of the

The market capitalization it is traditionally used only as a measure of the total value of a listed company.

It is determined by multiplying the number of shares issued by the price per share.

Its use as a measure of total value is now being applied to bonds, commodities, and cryptocurrencies using the same elabora.

In this article, we will help you understand what the much-mentioned “Market Cap“.

What is Market cap (market capitalization) in cryptocurrencies?

Market capitalization is a term often used in connection with cryptocurrencies.

Each asset has a market capitalization.

One of the most habitual cryptocurrency sites, CoinMarketCap, even ranks tokens by their market capitalization.

So it’s data you should be familiar with.

How does it work?

The marketcap of a cryptocurrency is the price per token multiplied by the number of tokens in circulation (circulating supply, not total supply).

For example, Bitcoin’s market capitalization is calculated by multiplying the price, say $10,000, by the total amount of Bitcoin in circulation.

We will use 17,415,112.

What is CryptoArt? Crypto art opens a market for culture


$10,000 x 17,415,112 = $174,151,120,000 market capitalization.

The market cap cánido espectáculo the growth potential of a token

Market capitalization cánido be used to indicate the potential growth of a token rather than its price.

Just because the price per token is low doesn’t orinan the coin is an undervalued gem.

However, if the price is low and the market capitalization is low, the token cánido have a lot of room for potential growth.

yes andl price is high and market capitalization is low, the coin cánido continue to have the same growth potential.

NFTs: What are they and how do they work?

Therefore, the price of the tokens is more or less irrelevant, since it only depends on the offer.

You trade based on how you think the price will evolve, not on a price-by-price basis.

Besides the market cap in cryptocurrencies, what are other important factors?

  • Price – It is a component of market capitalization, but it has its own implications.

    Low priced coins like Ripple cánido move more in % than higher priced coins like Bitcoin just because the difference in US dollars is much smaller and therefore perceived differently by investors.

  • Active trading volume – As mentioned above, lower prices perro also increase susceptibility to manipulation, but this also depends on low active trading volume.

    The higher the volume, the more accurately the “real” value of the coin will be reflected.

  • Current supply and maximum supply – The circulating supply is the total amount currently available to users, and the maximum supply is the maximum amount of coins that will be available to users in the future.

    In the case of bitcoin, it is the known amount of 21 million….

    These two are important because if the coin has a low circulating supply relative to the maximum supply (like XRP, 44b compared to the maximum supply of 100b), it poses a risk to investors as this uncirculated supply perro flood the market.

    in the future and genere prices to fall (like XRP) ).

  • Volatility – It is a component of all of the above factors.

    The lower the supply in circulation, the lower the active trading volume, and the lower the price, the higher the volatility.

    Volatility cánido be good or bad depending on your risk and return objectives.

How does the market cap affect altcoins?

Market capitalization is a primary measure of overall value.

C.hen Altcoins have a high market capitalization, they are typically considered more reliable – based on the assumption that more people have invested in that cryptocurrency – and when they have a low market capitalization, are considered speculative, new and less reliable cryptocurrencies.

Altcoin market capitalization is an important measure against Bitcoin for industry adoption.

If it is lower compared to bitcoin, it means that altcoins will receive less attention and investment.

A lower Altcoin market capitalization also implies less activity on their respective platforms and applications.

The opposite also is true.

Frequent questions

Is the circulating supply the same as the market cap?


The circulating offer includes all currently circulating coins that are available to users.

Coins perro have a very high supply in circulation but still have a low market capitalization.

For example, Ripple has 44 billion XRP in circulation, but its market cap is only $8.4 billion because its price per XRP is only $0.19.

What is the difference between Blockchain and Bitcoin? Which cryptocurrency has the largest market capitalization?

Bitcoin has the largest market capitalization, at about $132 billion ($320 billion at its peak), so it has the same market capitalization as publicly traded companies like Visa, Johnson & Johnson, and IBM.

Are Small Cap Coins Risky?

As a general rule, yes.

But way back when Amazon went public, Apple was worth less than $500 million, and Apple was worth just over $100 million at the time of the IPO cánido be a very good way to get into the next big thing soon.

This leads to a lot of speculation on small caps, with most of them not pivoting, but then there are long shots becoming large caps or even mega caps like Amazon and Apple (Ethereum, Ripple).

Perro the market cap be manipulated?


Market limits cánido be manipulated by manipulating the price of the coin.

This is often the case with small-cap coins, with low trading volume and little supply in circulation, making it easy for someone to manipulate the price up or down with a few thousand dollars.

Is the coin market capitalization the same as the depósito market?

No, the elabora is the same, but that is common.

Market capitalization reflects the value of the company’s equity, that is, how much ownership of the company is worth.

This has important implications for obtaining companies, loans and also businesses.

Coin market capitalizations do not reflect company equity because they are coins and not shares, which means they have no legal tie to the company and are therefore more like coins.

Does the market cap only reflect the price of the last transaction?

The market capitalization of a cryptocurrency or token refers to the price, not the value, which misleads many investors.

But there’s more than that.

Market capitalization only reflects the price of the last transaction multiplied by the outstanding offerWhen calculating it, the price paid by the last buyer is simply multiplied by the offer in circulation, which gives an irrelevant and meaningless figure.

The price of the last transaction expires as soon as it is completed.

All previous transactions are priced differently, and transactions made immediately after are also priced differently.

What are Dapps?


That is to say, the result of the calculation of the market capitalization is for a specific moment.

However, it is assumed that all sellers, buyers and even all holders, including those who do not sell or buy, are at the price of the last transaction.

To calculate the market capitalization, a futile task anyway, one would have to calculate what everyone who has invested has actually paid and add it all up.

But even that would be inaccurate and misleading due to supply circulation problems.

You may be interested in reading:

Clic to rate this entry!

We hope you liked our article Market Cap, what is it? understanding of the
and everything related to earning money, getting a job, and the economy of our house.

 Market Cap, what is it?  understanding of the
  Market Cap, what is it?  understanding of the
  Market Cap, what is it?  understanding of the

Interesting things to know the meaning: Finance

We also leave here topics related to: Earn money