What is market capitalization? Understand market capitalization in the cryptocurrency world in one minute

Market cap, calculated as (current price x total supply), gauges a cryptocurrency's size, liquidity, and market sentiment, serving as a barometer of its dominance in the industry.

Nov 13, 2024 at 12:41 am

What is Market Capitalization? Understanding Market Cap in Cryptocurrency in 60 Seconds

1. Definition:

Market capitalization (market cap) refers to the total value of all available coins or tokens of a specific cryptocurrency.

2. Calculation:

Market cap = Current price of the cryptocurrency x Total supply of coins/tokens

3. Importance:

Market cap serves as a key indicator of a cryptocurrency's size, liquidity, and overall market sentiment:

- **Size:** A higher market cap indicates a larger and more established cryptocurrency.
- **Liquidity:** Cryptocurrencies with larger market caps tend to be more liquid, making it easier for investors to buy and sell.
- **Market Sentiment:** Market cap fluctuations can reflect changes in investor confidence and speculation.

4. Tracking Market Cap:

Market caps can be tracked through cryptocurrency data websites and trading platforms like CoinMarketCap or Binance.

5. Top 10 Cryptocurrencies by Market Cap (as of February 2023):

OKX
Binance
Tether
USD Coin
Bitcoin
Ethereum
BNB
XRP
Cardano
Polygon

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