💡 The market capitalization of cryptocurrencies is the total volume of all coins in circulation multiplied by their current price. This is a key indicator that shows the health and dynamics of the market.
🔍 Why track capitalization?
Indicator of investor confidence: rising cap → influx of money into the market, falling → liquidity exit.
Comparison with other markets: crypto $2.2 trillion vs. gold $13 trillion.
Trend filter: rising total cap most often confirms a bullish cycle.
📌 Capitalization structure by types of cryptocurrencies:
1️⃣ Bitcoin (~50%)
The king of the market, often determines the overall direction. Its dominance indicates where capital is going — into ‘digital gold’ or into altcoins.
2️⃣ Ethereum and smart contracts (~20%)
Projects with DeFi, NFT, and dApps. Growth in this share = activity of developers and investors.
3️⃣ Stablecoins (~10%)
USDT, USDC, and others. Their growth signals that investors are holding ‘cash ready’ or moving to safety.
4️⃣ Altcoins and meme coins (~15%)
High-risk sector. Explosive growth here often heralds market overheating.
5️⃣ DeFi and AI tokens (~5%)
New trends being monitored by venture capital.
📈 What does this mean for traders?
Rising BTC dominance = market caution.
Decrease in BTC share and increase in altcoins = start of ‘alt season’.
Increase in the share of stablecoins = investors taking profits and waiting for the right entry moment.
🔮 Conclusion:
Market capitalization is the ‘pulse’ of the crypto industry.
By tracking its dynamics and distribution, traders can understand: the market is in a growth phase, accumulation, or exit.
