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What Is Crypto Market Cap?

Small-cap crypto assets are generally considered high-risk, high-reward assets. Now that we have an understanding of what market cap is and why it’s important, let’s examine some of the factors that can affect a cryptocurrency’s market capitalization. The capability of running smart contracts makes Ethereum a blockchain platform that developers can build on. It’s used to create decentralized apps (dApps), which are essentially apps that run on a blockchain.

The tradition of forecasting and/or predicting financial markets is a well-worn one, and the frequency with which many market watchers are wrong is another well-known trope. Finding the next 100x gem is often a case of focusing on quality micro-cap cryptocurrencies. This is because micro-caps have considerable room for growth, especially if they are behind innovative concepts. Those on a budget are constantly on the lookout for the best micro-cap cryptocurrencies. The reason for this is that even with a small investment, if a micro-cap ‘moons’ the returns can be sizable. Similarly, when Love Hate Inu completes its presale campaign, it will list on exchanges with a micro-cap valuation.

  • This has to do with the number of users that are actually on a crypto trading network.
  • You could think of it as a snapshot, just like the current market cap – but it’s a snapshot that tries to estimate future value.
  • Alongside TradFi banks there have also been several moves by payment processors to allow, accelerate, or at least enable tokenized payments.
  • For example, voters no longer need to worry about voter intimidation, as all votes are anonymous.

Contracts for Difference (“CFDs”) are leveraged products and carry a significant risk of loss to your capital. Please ensure you fully understand the risks and seek independent advice.By continuing to use this website you agree to our terms and conditions and privacy policy. There are other aspects of the industry to research before making any financial commitments. Even though one BobCoin is 50 times cheaper than one AliceCoin, the value of the BobCoin network is still higher than the value of AliceCoin. This is why market capitalization is a better estimation of a network’s value than simply the price of an individual coin. Coins with a larger total supply are usually priced much less expensively.

Total Market Capitalization Dominance, %%

When making investment decisions, investors must consider other factors like technology, adoption, use case, and market cap alone. Making financial decisions based on the total crypto market capitalization can be misleading for many different reasons. Often referred to as the “market cap”, market capitalization is the current market value of a cryptocurrency network. It’s calculated by multiplying the circulating supply of a crypto asset by the price of an individual unit. For example, let’s say that a cryptocurrency has a price of $100 and a circulating supply of one million coins. Since market caps are based on cryptocurrency prices, they’re constantly changing.

Similar to stock prices, it is influenced heavily by supply and demand dynamics, trading activity, and market sentiment. The market capitalization of a cryptocurrency is calculated by multiplying the token price by the number of coins it has in circulation to determine its value. In traditional finance, market capitalization allows you to assess a company’s size, value and potential for future growth.

  • For example, if the crypto wallet is hacked and the tokens are stolen, the user can make a claim.
  • This is a reference used by investors to figure out how big a company is.
  • This text is informative in nature and should not be considered an investment recommendation.
  • Once LHINU is listed on an exchange, this will enable the project to attract buyers on a global stage.

Total Supply The total supply refers to the total amount of tokens presently in existence, subtracting the tokens burned. These cryptos come with higher risk but also have more upside potential. For example, long-term investors gravitate to a company’s fundamentals. On the other hand, short-term traders who gravitate to swing or even day trading are more apt to study technical analysis. If you’re new to trading, make sure to check out the Master Technical Analysis course at Moralis Academy.

What Is the Total Market Cap?

Some critics claim that it’s an unwelcome legacy of the stock market — leading to misguided investment decisions and contributing to substantial levels of fear and greed. Generally speaking, the bigger the market cap of a company the more stable the investment. Mid-cap crypto assets may offer more significant price appreciation compared to large-caps, but come with higher risk.

Beginner’s Guide: What is Crypto Market Cap?

Investors can deposit their crypto assets into Tectonic to earn dynamic yield without lockup periods while borrowers can borrow liquidity by supplying their crypto assets as collateral. To calculate a coin’s market cap, you multiply the number of coins that have been issued by the price of a single coin. For example, on July 21, 2021, the supply of Ether was 116.8 million coins. Multiply that by the coin price of 1,588.61 euros, and you arrive at the Ethereum market cap of 185.5 billion euros. Cryptos with higher market caps will appeal to those who want more stability and less volatility. But for those who are more risk-tolerant and want to hit that rocketship to the moon, lower caps will be the way to go.

You can make smarter investment decisions based on cryptocurrency market capitalization, a simple, straightforward method of determining a currency’s size. CoinMarketCap was the first to introduce the concept of ranking crypto assets based on a coin’s market capitalization. Cryptocurrency is still a fairly volatile investment – and some people would even say it’s a gamble.

Best Micro-Cap Cryptocurrency to Invest in 2023

Small caps are high-risk investments due to their smaller size, novelty, and the markets they serve. So, when faced with market shocks and economic slowdowns, they can take a harder hit than the larger caps. But, they offer an enormous opportunity for profits because of their massive upside potential. After a company starts to publicly trade its shares on a stock exchange, supply and demand forces will kick in to determine its price.

Tectonic community

The market capitalization of cryptocurrencies is often used to rank them within the broader cryptocurrency market to assess their relative size, significance, and popularity. Market cap is a metric that compares and evaluates different cryptocurrencies by combining current price and circulating supply. Making it an important ranking criterion in crypto, it identifies the largest and most established cryptocurrencies. It is a key factor in index inclusion, investment decisions, and market trends. Also, market cap is a very important factor in index inclusion and portfolio management.

Basic economics dictates that high demand for a stock increases its share price. This situation can occur when too many investors conclude that a company’s future for potential growth is not there. But, before we specifically delve into the question of “what is crypto market cap? Let’s first look at how the market cap works in traditional markets. Calculating the diluted market cap would take the maximum supply of Bitcoin into account instead. As such, we take 21 million and multiply it by the current BTC price of $10,550.